Wednesday, July 23, 2014

2Q 2014: LG Display Earnings Report.



LG Display, the world’s leading innovator of display technologies, reported today unaudited earnings results based on consolidated K-IFRS (International Financial Reporting Standards) for the three-month period ending June 30, 2014.
  • Revenues in the second quarter of 2014 increased by 7% to KRW 5,979 billion from KRW 5,588 billion in the first quarter of 2014 and decreased by 9% from KRW 6,572 billion in the second quarter of 2013.
  • Operating profit in the second quarter of 2014 was KRW 163 billion, a quarter-on-quarter increase of 73% from an operating profit of KRW 94 billion and a year-on-year decrease of 55% from the operating profit of KRW 366 billion.
  • EBITDA in the second quarter of 2014 was KRW 1,008 billion, a quarter-on-quarter decrease of 1% from KRW 1,015 billion and a year-on-year decrease of 24% from KRW 1,324 billion.
  • Net income in the second quarter of 2014 was KRW 256 billion compared with net loss of KRW 82 billion in the first quarter of 2014 and net income of KRW 105 billion in the second quarter of 2013.
LG Display recorded an increase both in revenues and in operating profit in the second quarter of 2014 despite the recent sharp appreciation of the Korean currency. The company also posted its ninth straight quarterly operating profit at KRW 163 billion, a quarter-on-quarter increase of 73%, driven by seasonal demand growth, increased shipment for large-size panels such as for Ultra HD TVs, and price increases for some products.

LG Display shipped a total of 9.36 million square meters of net display area in the second quarter of 2014, an increase of 12% quarter-on-quarter. TFT-LCD panels for TVs, monitors, mobile applications, notebook PCs, and tablets accounted for 42%, 21%, 16%, 12%, and 9% respectively on a revenue basis in the second quarter of 2014.

With 96% in liability to equity ratio, 106% in current ratio, and 21% in net debt to equity ratio as of June 30, 2014, the financial structure of the company remains stable.

Outlook

The following forecast is based on information as of July 23, 2014. The Company does not expect to update its estimates until the next quarter’s earnings announcement. However, the Company reserves the right to update its full business outlook, or any portion thereof, at any time and for any reason.

“LG Display has structurally managed foreign currency risk from a long term perspective. Rapid changes in the exchange rate in the second quarter of 2014 impacted negatively on the operating profit, however, net income improved due to valuation gains from foreign currency dominated debt,” said Don Kim, CFO of LG Display. “With increases in panel prices expected to continue in the third quarter along with seasonal demand growth and the trend toward larger size panels for TVs, we anticipate both revenues and profits to improve in the third quarter, especially driven by an increase in the average selling price per area resulting from increased shipments of small- and mid-size panels that have a higher panel price per area.”

LG Display will continue to make efforts to generate mid- and long-term profits by building on its OLED TV leadership, maintaining its competitive advantage in the LCD business with its IPS and copper line technology, and further developing differentiated small and mid-size products including plastic OLEDs, while preparing for future growth by expanding new businesses including the automotive sector.

Note: Estimates contained in this statement are based in accordance with the amendment to K-IFRS 1001. Operating profit is defined as earnings after the cost of sales and operating costs are deducted from total revenue.


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