Innvesting.com -- LG Electronics (KS:066570) on Thursday reported a net loss of 713.7 billion KRW in the fourth quarter of 2024, marking a sharp decline from a net profit of 90.2 billion KRW in the previous quarter and a loss of 76.4 billion KRW in the same period the year prior.
Revenue increased slightly to 22.76 trillion KRW, up 0.1% year-over-year and 2.6% quarter-on-quarter.
The company cited sluggish global demand, fluctuating exchange rates, and increased operational costs as factors hindering substantial revenue growth.
Operating profit declined sharply to 135.4 billion KRW, falling 82% quarter-on-quarter and 56.7% year-over-year.
This decrease was due to higher marketing and logistics costs, coupled with reduced income from non-operating activities.
The company’s Home Appliance and Air Solution division posted sales of 7.42 trillion KRW, an 11% year-on-year growth attributed to strong sales in North America and emerging markets.
This segment incurred an operating loss of 117.3 billion KRW, driven by increased costs and a slower-than-expected market rebound.
In the Home Entertainment segment, sales grew by 5.3% year-on-year to 4.37 trillion KRW, supported by demand for premium products like OLED TVs and an expanding webOS platform.
Yet, operating profit fell to 37.3 billion KRW, hindered by higher marketing expenditures during peak seasons.
The Vehicle Component Solutions division saw a slight increase in sales to 2.65 trillion KRW but incurred an operating loss of 20 billion KRW, primarily due to higher R&D expenses.
The Business Solutions division posted a 1.6% decline in sales to 1.25 trillion KRW, with profitability impacted by increased market competition.
“The spread of protectionism and concerns over inflation are expected to continue fueling macroeconomic uncertainties, including the reshaping of the global supply chain and delays in interest rate cuts,” the appliance and consumer electronics company said in a statement.
“Additional pressures arise from slow demand recovery in major businesses, fluctuating exchange rates, and vulnerabilities in the cost structure,” the company added.
Shares of LG Electronics closed lower at 2.2% on Thursday.