LG Display posts Q3 losses of $377 million

Losses mount as company changes to OLED production

by Andy Bassett
TV News

LG Display posts Q3 losses of $377 million

LG Display’s third quarter financial report shows a second consecutive period of losses for the company which reflects the continuing changes afoot in the display manufacturing sector and its attempts to meet those challenges.

The South Korean display manufacturing giant has released figures for the period of July to September 2019 which show an overall net loss of KRW442 billion, which is roughly USD $377 million. This compares to net losses of USD $469 million from the second quarter of 2019 and a net income of USD$15 million from the same period in 2018.

There was a reported quarter on quarter increase in total revenue of 9 percent to KRW 5,822 billion, approximately USD $4.9 billion, which has been bolstered by increased sales of the company’s POLED mobile phone screens, but the overall losses were incurred as a result of the challenging LCD TV panel market. According to the press statement by LG Display, LCD panel prices declined more steeply than market expectations and a reduced utilisation rate of LCD production lines as some were closed down contributed to the loss.

According to market researcher WitsView, who monitor global display price fluctuations, the average price of 50-inch LCD panel for TVs fell to $94 in August, down 13 percent from three months ago. This fall in price is the result of an over saturated market driven by a glut of cheaply produced panels by Chinese manufacturers and is being exacerbated by a fall in demand too.

TV panels accounted for 32 percent of LG Display’s revenue for the period, which is down 9 percent from the previous quarter, while panels for mobile devices increased to 28 percent and tablets/laptops and desktop monitors accounted for 21 and 18 percent respectively.

The company’s deficit continues at a time of huge change for LG Display as market challenges are addressed by a move to OLED production, thus the associated increased investment in new production facilities has also contributed to the overall loss.

By streamlining its LCD production to cut increasing losses the company expects to diversify into more innovative areas of LCD panel capabilities including IT, commercial, and automotive displays.

Dong-hee Suh, CFO and Senior Vice President of LG Display, commented, “We will step up our efforts to accelerate the trend for large-size OLED displays by highlighting their premium value and continue to maintain efforts to stabilize the POLED business. LG Display will try to wrap up the structural improvement of its LCD business as soon as possible and will communicate with the market by setting up a long-term vision focusing on technologies and products that can provide differentiated value.”

The opening of LG Display's new Guangzhou based OLED production facility means up to 60,000 new OLED sheets will be produced per month which will rise to a total of 130,000 monthly units when combined with production from its South Korean plant. However, the company accepts that this will all be too late to offset an expected third consecutive loss in Q4 of 2019. In addition, it recently laid off some of its senior executives as the streamlining process started to impact.

LG DIsplay’s ultimate target is to produce 10 million OLED panels per year by 2022.

Source: Press release, Yonhap News Agency
Image Source: LG Display
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