LG Display Reports Second Quarter 2020 Results2020.07.23
SEOUL, Korea (Jul. 23, 2020) – LG Display today reported unaudited earnings results based on consolidated K-IFRS (International Financial Reporting Standards) for the three-month period ending June 30, 2020.
■ Revenues in the second quarter of 2020 increased by 12% to KRW 5,307 billion from KRW 4,724 billion in the first quarter of 2020 and decreased by 1% from KRW 5,353 billion in the second quarter of 2019.
■ Operating loss in the second quarter of 2020 recorded KRW 517 billion. This compares with the operating loss of KRW 362 billion in the first quarter of 2020 and the operating loss of KRW 369 billion in the second quarter of 2019.
■ EBITDA in the second quarter of 2020 was KRW 413 billion, compared with EBITDA of KRW 630 billion in the first quarter of 2020 and with EBITDA of KRW 458 billion in the second quarter of 2019.
■ Net loss in the second quarter of 2020 was KRW 504 billion, compared with the net loss of KRW 199 billion in the first quarter of 2020 and the net loss of KRW 550 billion in the second quarter of 2019.
LG Display registered KRW 5,307 billion in revenues and KRW 517 billion in operating loss in the second quarter of 2020.
The company generated a 12% quarter-on-quarter increase in revenue in the second quarter thanks to a surge in IT panel shipments driven by the growing trends of working-from-home and online education amid COVID-19.
LG Display recorded an operating loss of KRW 517 billion, compared with the previous quarter’s operating loss of KRW 362 billion, due to a growing burden of fixed costs resulting from adjusting panel production for TV and mobile products to respond to global uncertainty in demand in addition to the impact of weakening demand in some industries including smartphones and automobiles.
Panels for IT devices, such as tablets, notebook PCs, and desktop monitors, accounted for 52% of the revenue in the second quarter of 2020, passing the 50% mark for the first time thanks to the growing trends of working-from-home and online education. Panels for tablets and notebook PCs accounted for 29% and desktop monitors for 23% respectively, while those for mobile devices accounted for 25% and TVs for 23%.
LG Display recorded 190% in the liability-to-equity ratio, 88% in the current ratio, and 91% in the net debt-to-equity ratio as of June 30, 2020.
The company will make efforts to see an improved business performance from the latter half of this year by starting mass-production at its large-size OLED panel plant in Guangzhou, China, as well as by increasing smartphone P-OLED panel shipments and expanding the supply of high value-added LCD panels for IT products.
As for its large-size OLED business, LG Display will have its production capacity expanded from the current 70,000 sheets to 130,000 sheets per month with its two production bases in Paju, Korea and Guangzhou, China. With this expanded production capacity, the company expects to effectively respond to growing demand for TVs when offline retail stores resume their operations around the world.
In addition, LG Display will focus on securing supply stability for its P-OLED business during the peak season in the latter half of the year, while further strengthening its LCD business through IT panels with differentiated competitiveness by actively seizing growing opportunities that the post-COVID-19 era will bring about.
“Considering the prolonged COVID-19 pandemic, it is true that the macroeconomic environment is still not favorable. However, we observe that the worst is over,” said Dong-hee Suh, CFO and Senior Vice President of LG Display. He added, "From the latter half of this year, we will be able to gradually generate tangible results from our three key strategic tasks that we’ve been pursuing such as ‘expanding the large-size OLED display business,’ ‘achieving P-OLED turnaround,’ and ‘accelerating structural innovation of the LCD business’ by focusing on high value-added products including IT panels.”