Beating Whirlpool and Elektrolux
LG Electronics’ Home Appliance & Air Solution (HA) business division ranked first in the global market in terms of sales in the first half of this year, beating Whirlpool and Elektrolux. It outdid Whirlpool for the first time in both operating profit and sales thanks to robust sales of new home appliances such as dryer, styler and air purifier.
LG Electronics announced on July 30 that its H&A business division posted 6.10 trillion won (US$5.16 billion) in sales and 717.50 billion won (US$606.61 million) in operating profit in the second quarter. The quarterly sales of the division surpassed the 6 trillion won (US$5.07 billion) mark for the first time. Its operating profit also exceeded 700 billion won (US$591.87 million) for two quarters in a row.
In particular, the division’s first-half sales came to 11.57 trillion won (US$9.78 billion), overtaking Whirlpool, the largest home appliance producer in the world. Whirlpool recorded sales of 11.40 trillion won (US$9.64 billion) and an operating profit of 520.30 billion won (US$440.11 million) in the first half of this year. The operating profit of LG Electronics has exceeded that of Whirlpool from 2017, but it is the first time that the company overdid Whirlpool in sales. LG Electronics far outpaced European home appliance firm Elektrolux, which posted 7.56 trillion won (US$6.39 billion) in sales and 229.80 billion won (US$194.42 million) in operating profit.
However, the company’s Mobile Communications (MC) business division, which is in charge of smartphones, adversely affected the overall performance of the company. The division incurred one-time cost for the relocation of its production lines. Securities companies estimated the division’s operating loss at 200 billion won (US$169.20 million), but the actual operating loss reached 313 billion won (US$264.81 million). Its 5G strategic smartphone “LG V50 ThinQ” showed buoyant sales, but the operating loss grew owing to the rise in marketing costs.
The operating profit of the Home Entertainment (HE) business division, which is in charge of televisions, halved to 205.60 billion won (US$173.94 million) from 407 billion won (US$344.33 million) a year earlier. The television market became more competitive and the exchange rate worked against LG Electronics this year contrary to last year when it benefited from the World Cup.