LG Display Reports Fourth Quarter 2022 Results

LG Display reported unaudited earnings results based on consolidated K-IFRS (International Financial Reporting Standards) for the three-month period ending Dec. 31, 2022.

Revenues in the fourth quarter of 2022 increased by 8% to KRW 7,302 billion ($5.92 billion) from KRW 6,771 in the third quarter of 2022 and decreased by 17% from KRW 8,807 in the fourth quarter of 2021.

Operating loss in the fourth quarter of 2022 recorded KRW 876 billion ($710 million). This compares with the operating loss of KRW 759 billion in the third quarter of 2022 and with the operating profit of KRW 476 billion in the fourth quarter of 2021.

EBITDA in the fourth quarter of 2022 was KRW 209 billion ($169 million), compared with EBITDA of KRW 391 billion in the third quarter of 2022 and with EBITDA of KRW 1,645 billion in the fourth quarter of 2021.

Net loss in the fourth quarter of 2022 was KRW 2,094 billion ($1.7 billion), compared with the net loss of KRW 774 billion in the third quarter of 2022 and with the net income of KRW 180 billion in the fourth quarter of 2021.

LG Display saw a decrease in panel shipments in the fourth quarter due to worsening macroeconomic conditions, as set makers’ inventory adjustments further impacted demand in the high-end product sector which had been solid.

The company recorded a quarter-on-quarter increase in revenues by 8% thanks to increased panel shipments for mobile devices, while reporting an operating loss due to a continuous decline in mid-sized panel prices and a high-intensity action plan of utilization adjustment to decrease inventory.

Panels for TVs accounted for 25% of revenues in the fourth quarter, while panels for IT devices including monitors, laptops and tablet PCs accounted for 34%, panels for mobile and other devices accounted for 34%, and those for automobiles accounted for 7%.

LG Display will make all-out efforts to improve the financial structure by strengthening its operations focusing on market-to-order business in response to market volatility and economic uncertainty.

With respect to the market-to-order business, which now accounts for 30% of its revenue, LG Display will expand its share in revenue by over 40% in 2023 and 50% in 2024 to establish a stable profit structure resilient to market conditions.

In addition, the company will further strengthen its position in the automotive display sector and continue to lead the mid-sized OLED market including tablet PCs, as the rise in smartphone panel shipments in the second half of 2023 is expected to add positive fuel to its efforts to enhance its market-to-order business.

After the company’s decision to end its LCD TV panel production in Korea, LG Display’s large-sized OLED business was evaluated by an external institution and divided into separate cash-generating unit in accordance with related accounting standards and objective procedures. The company’s large-sized OLED business was reflected KRW 1,331 billion as asset impairment loss after calculated by an external institution, causing the net loss to expand. Considering it occurred only in the financial statement without actually affecting business operations, it is in turn expected to remove possible uncertainties in the company’s businesses in the future.

For its large-sized OLED business, LG Display will further strengthen its profit structure by improving competitiveness in products and costs while concentrating continuously on qualitative growth. In addition, the company will make efforts to enhance its market position by further improving its fundamental competitiveness with its OLED technology, as well as expanding its market-creating business with high growth potential such as Transparent and Gaming OLED panels.

LG Display will also secure financial soundness by minimizing its investment such as investing only in essential and market-to-order businesses, while maintaining its inventory at the minimum level and flexibly adjusting production accordingly.

“Our preemptive move to reduce the company’s inventory in the fourth quarter is expected to improve our performance down the road, and the quarterly result is also expected to improve as we continue to intensely reduce our costs,” said Sung-hyun Kim, CFO and SVP at LG Display.