LG unveils pandemic's impact on its Q2 2020 Financial Results

LG Electronics' Q2 2020 financial results were significantly hit by the worldwide impact of the COVID-19 pandemic as big declines were revealed.

LG shows hit of COVID-19 in its financial report

LG Electronics Financial Results Q2 2020

The company has a consolidated revenue of USD 10.51 billion which was 17.9 percent lower compared to Q2 2019. The operating revenue, on the other hand, is at USD 405.65 million which is a decline of 24.1 percent from 2019's.

Amidst these declines, LG showed its resilience as it managed its supply chain and cost structure to soldier on.

The LG Home Appliance and Air Solution Company reported revenues of USD 4.22 billion which is 15.5 percent lower from Q2 2019. Operating income of USD 514.23 million showed a 12.5 percent decline YoY even though operating profit margin of 12.2 percent was the highest second quarter in the history of LG H&A Company.

The LG Home Entertainment Company's sales totaled to USD 1.85 billion which is a decline of 24.4 percent from last year. Operating income is USD 93.37 million which is 25.9 percent lower. In addition to continuing to reduce material costs, the LG HE Company is aggressively controlling marketing investments, increasing the proportion of premium TV products, expanding online sales, and further optimizing operating efficiencies to bring profitability in line with last year.

The LG Mobile Communications Company posted a Q2 2020 sales revenue of USD 1.07 billion which is a 31.1 percent increase compared to Q1 2020. The operating loss of USD 169.10 million narrowed compared to both the second quarter of 2019 and the first quarter of 2020 as a result of improved marketing efficiencies and greater cost controls. The global rollout of LG VELVET in the third quarter along with the launch of new attractively-priced models are expected to create momentum for LG smartphones.

The LG Vehicle Component Solutions Company recorded quarterly revenues of USD 746.95 million which is a 40 percent decline from the same quarter last year, and an operating loss of USD 165.82 million as a result of pandemic-related manufacturing shutdowns of global automakers. Demand for auto parts is expected to gradually recover as major automakers resume operations.

The LG Business Solutions Company reported sales of USD 1.07 billion in the second quarter, 12.6 percent lower than Q2 2019 while operating income declined to USD 80.49 million.

To help tackle the ongoing challenges, LG’s B2B division is focused on creating business opportunities in the growing "untact" trend, with a focus on expanding sales of premium digital signage products, strengthening its competitiveness in solar modules and capturing a greater share of the telecommuting and distance-learning markets.

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