Laundry appliances of LG Electronics line up at an electronics store LG Best Shop in Seoul Thursday. (Yonhap)
LG Electronics saw its home appliance business set a new record in 2021 with revenues jumping 21.7 percent to 27.11 trillion won ($22.92 billion), outstripping the performance of its US rival Whirlpool that showed net sales of $22 billion, its earnings release showed Thursday.
The performance of the business -- dedicated to refrigerators, washing machines, air conditioners and hygiene-related products -- drove LG Electronics‘ overall full-year revenue to an all-time high, at 74.72 trillion won, up 28.7 percent. The figure remained largely unchanged from its earnings guidance earlier in January.
Its home appliance operations logged 2.22 trillion won in operating profit, up 8.2 percent from the previous year, as LG Electronics, dedicated to home appliances, TVs, monitors, vehicle components among others, showed a 5.2 percent rise in operating profit to 3.86 trillion won.
But its officials during the earnings call cast a grim outlook for the year to come, due to raw material price hikes and port congestions.
The impact and uncertainties will be greater in its North America business, where monetary tapering and the resurgence of COVID-19 variants are at play, leading to a deceleration in demand growth in the region.
“Revenue growth in 2022 is forecast to decline year-on-year. Due to raw material prices and logistics costs, profitability is expected to slightly decline year-on-year,” Kim I-kueon, vice president in charge of H&A Business Management Division, said during the briefing.
Kim added that LG would go all out to mitigate the impact by implementing multisourcing and saving logistics costs.
Moreover, LG’s focus will lie on premium products and large-capacity goods, adding it is crucial to adapting to the change in consumer patterns with the advent of live commerce platforms and the metaverse, Kim also said.
By Son Ji-hyoung (email@example.com