LG Electronics said Wednesday it expected to set record-high annual sales for 2024, overcoming a challenging environment marked by sluggish demand and heightened external uncertainties.
LG estimated that its sales reached 87.74 trillion won ($60.3 billion) last year, up 6.7 percent from a year earlier. This marks a new all-time high, surpassing the 82.52 trillion won reported in 2022.
However, operating profit for the year declined by 6.1 percent on-year to 3.43 trillion won. Data for net income was not available for Wednesday’s earnings guidance.
Despite the drop in earnings, LG said that it had maintained stable profitability on an annual basis, even in the face of continued global challenges.
Over the past four years, the company has achieved a compound annual growth rate of more than 10 percent in revenue, demonstrating a robust financial performance amid a volatile global market.
“New business models, such as home appliance subscriptions and direct-to-consumer sales, played a pivotal role in driving our key business beyond its limitations,” said an LG Electronics official.
The company also noted that growth in its business-to-business segment further contributed to the overall revenue increase.
Despite the challenging conditions, including an unexpected surge in global shipping costs and uncertainties in the business environment, LG remained positive about its long-term trajectory.
“While some one-off costs impacted profitability, primarily due to efforts to streamline inventory and adjust to market changes, the overall portfolio restructuring is expected to drive qualitative growth,” an LG Electronics official added.
For the fourth quarter, however, LG expected a significant downturn in profit. The home appliance maker estimated its operating profit for the October-December period came in at 146.1 billion won, down 53.3 percent from a year ago.
The profit estimate was far lower than the consensus of 397 billion won by local analysts, provided by FnGuide.
Sales inched up by 0.2 percent on-year to 22.78 trillion won, slightly higher than the consensus of 22.51 trillion won.
In the meantime, LG remains optimistic about its future growth prospects. It said it looks to accelerate qualitative growth through innovation in its business portfolio.
“By strengthening our key competitive advantages in quality and cost, we will focus on securing a sound profit structure, while improving fixed cost efficiency,” said an LG Electronics official.
By Jie Ye-eun ([email protected])
