Along with other IT companies, LG also published its financial statements. And if another Korean giant – Samsung – quite confidently spent the quarantine quarter and even increased its operating profit, then LG is not doing so well.
According to LG, the coronavirus pandemic has had a significant impact on its effectiveness. All five key business units experienced a decline in revenues (from 12.6% to 40%) compared to the same period last year. The company’s total revenue was $ 10.51 billion, down 17.9% from the second quarter of 2019. Operating profit decreased by 24.1% – to $ 405.65 million. The negative impact of the pandemic on operating profit was partially mitigated thanks to improved efficiency in supply chain management and cost structure.
The saddest situation is in LG’s mobile business. In the second quarter of 2020, the Mobile Communications Company division generated revenue of $ 1.07 billion, which is 31.1% more than in the first quarter of 2020, but 18% less than the same period in 2019. Thus, LG’s mobile division has shown a steady decline in revenue for 11 consecutive quarters (compared to the same period last year). Moreover, the last time such a low volume of income in the mobile segment of business was observed in the second quarter of 2003 (adjusted for inflation). In the reporting period, this division received an operating loss in the amount of $ 169.1 million.