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LG Display posts record loss in Q4 due to weak demand

LG-DISPLAY-RESULTS:LG Display posts 3rd consecutive quarterly loss on weak panel demand
LG-DISPLAY-RESULTS:LG Display posts 3rd consecutive quarterly loss on weak panel demand Copyright Thomson Reuters 2023
Copyright Thomson Reuters 2023
By Reuters
Published on Updated
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By Joyce Lee and Heekyong Yang

SEOUL - South Korean display panel maker LG Display on Friday posted a record operating loss in the December quarter, as global demand for smartphones, computers and televisions remains depressed amid an uncertain economic outlook.

The Apple Inc supplier posted a 876 billion won ($711.13 million) operating loss for the October-December quarter, compared with a profit of 476 billion won in the same period a year earlier.

It missed an average forecast of a 797 billion won loss from 10 analysts polled by Refinitiv SmartEstimate, which is weighted toward analysts that are more consistently accurate.

The loss was due to a continuous decline in mid-sized panel prices and a "high-intensity" effort to control inventory and reduce factory operations, LG Display said in a statement.

Sluggish demand from large European clients for higher-margin large organic light-emitting diode (OLED) TV panels, as well as laptop and monitor manufacturers further weighed, analysts said.

Revenue fell 17% to 7.3 trillion won, LG Display said.

Analysts forecast continued operating losses for the display maker in the current quarter, as consumers cut back spending and businesses slash jobs to ride out harder times.

In order to weather the downturn, LG Display said last month it is stopping production of liquid-crystal display (LCD) TV panels in South Korea.

The display maker has offered voluntary leave of absence for a small number of domestic office workers as well as some production personnel.

Analysts said the company is also reducing LCD panel production in China, and adjusting factory utilisation rates for its flagship OLED panels for TVs.

LG Display said it plans to boost its made-to-order business to increase stability in the face of uncertain market conditions, from 30% of sales currently to 50% of sales by 2024.

The company accounted for its large-sized OLED panel business as a separate unit during fourth quarter, which was reflected as an 1.3 trillion won asset loss, leading to a quarterly net loss of 2.1 trillion won.

($1 = 1,231.8400 won)

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