SEOUL, Feb 5: LG Electronics Inc. said on Wednesday its net profit fell 1.9 per cent last year due to losses from investments in subsidiaries and the advance booking of bonus payments.
Net profit fell to 497.6 billion won ($422m) from 507.3 billion won a year earlier. But operating profit rose 29.2 per cent to 1.03 trillion won.
Sales rose 16.9 per cent to 18.6 trillion won, helped by the strong performance of mobile handsets and high-end home and digital appliances.
Handset shipments rose 58 per cent to 16 million, supported by robust exports and strong domestic demand, the company said.
LG Electronics, the country’s largest computer screen maker, booked a net loss of 179.1 billion won in the three months to December, compared with a 116.1 billion won net profit in the previous quarter.
Fourth quarter operating profit fell to 42.2 billion won from 190.1 billion won in the third quarter, while sales rose to 4.61 trillion won from 4.4 trillion won.
The company attributed the fourth quarter loss to losses from its investment in units including LG Philips Display, and the advance booking of the payment of bonuses to be paid in the first quarter of this year.
Hyundai Securities analyst Simon Woo said the net loss in the fourth quarter had been discounted.
“It’s been known that it will turn to a loss in the fourth quarter. But what is more important is that its results will likely improve in the first half,” Woo said.
The analyst based his positive view on prospects of solid handset operations, and improving liquid crystal display (LCD) operations.
The company said it aims to achieve sales of 18.3 trillion won this year by focussing on home appliances, optical storage and digital products.
It plans to increase its capital expenditure by 35 per cent to 770 billion won and spend 980 billion won on research and development.
It set a target for third generation handset sales of 23 million for this year, an increase of 46 per cent and plans to secure licences from the Chinese government to sell GSM handsets in China.—AFP