LG Electronics Q1 profit down 23% on slow demand

Seoul, April 27:LG Electronics, the South Korean technology giant, has announced that its operating profit for the first quarter of 2023 has dropped by 23% from the same period last year. The decline was attributed to the macroeconomic challenges that have affected consumer demand worldwide.

In a statement released on Thursday, the company reported operating profit of KRW 984.5 billion ($824 million) for the first three months of the year. This was down from KRW 1.28 trillion ($1.07 billion) in the same period last year. The figures are also lower than the KRW 1.08 trillion ($904 million) expected by analysts.

The decline in profits was mainly due to lower sales of LG's mobile phones and home appliances. The company's smartphone sales fell by 32% from a year earlier, while its home appliance sales were down 17%. In contrast, the company's TV sales increased by 8% during the quarter.

The COVID-19 pandemic has continued to affect consumer spending patterns globally, with many people focusing on essential purchases and delaying major purchases like new smartphones and home appliances. This trend has affected many companies in the technology and consumer goods industries.

Despite the drop in profits, LG remains optimistic about its future prospects. The company said it plans to launch new products in the coming months, including a range of 5G-enabled smartphones and home appliances that integrate artificial intelligence (AI) technology.

"LG Electronics is committed to continuous innovation and investment in cutting-edge technology to ensure sustainable growth and to meet the changing needs of our customers," said Brian Kwon, CEO of LG Electronics.

The company is also said to be exploring new business opportunities in the automotive and robotics sectors, as it seeks to diversify its revenue streams and reduce its reliance on the mobile phone and home appliance markets.

LG Electronics is one of South Korea's largest companies, with a presence in various industries including electronics, chemicals, and telecommunications. The company reported revenue of KRW 65.3 trillion ($54.6 billion) in 2022.