(LG Display Co.)
LG Display Co., a major display panel maker in South Korea, on Wednesday said it has swung to the black in the second quarter of the year on the back of rising LCD panel prices and improvements in the OLED display business.
The world's leading large-size OLED display maker reported a net profit of 423.8 billion won ($368.5 million), shifting from a loss of 503.8 billion won a year earlier.
Operating income for the April-June period was 701.1 billion, compared with a loss of 517 billion won a year ago, the company said in a regulatory filing. It was the first time in four years that its operating profit surpassed 700 billion won.
Sales rose 31.3 percent to 6.96 trillion won, which was the largest for any second quarter in its history.
Its EBITDA (earnings before interest, taxes, depreciation, and amortization) margin stood at 25.4 percent, the highest since the third quarter of 2009.
On a quarter-on-quarter basis, its net profit jumped 59.4 percent, while operating profit increased 34 percent. Sales inched up 1.2 percent from the first quarter.
The affiliate of LG Group said its display panel shipment area reached 8.9 million square meters in the second quarter, up from 6.7 million square meters a year ago, while the blended average selling price of its displays reached $703 per square meter, up from $654 from a year earlier.
Its production capacity increased to 11.6 million square meters from 9.3 million square meters a year ago.
By product, panels for IT products accounted for 39 percent of its revenue in the second quarter, followed by TV panels with 38 percent. Mobile displays and other screen products made up 23 percent of its sales.
LG Display said it plans to beef up its OLED TV panel business, saying that it aims for the large-size OLED business to expand profits in the second half of the year and achieve an operating margin of a mid-to-high single digit percentage in 2022.
With its OLED business on the rise, the company projected OLED TV sales to reach 8 million units this year, with 3.5 million units shipped in the first half of the year.
In a conference call, LG Display expected it will be able to supply 10 million OLED TV panels next year and 11 million in 2023, with its plant in Guangzhou, China, expanding its capacity.
The company added it is also reviewing a plan to expand the capacity of its plastic OLED panels.
In the LCD sector, LG Display said it is trying to set up a stable business structure that does not swing during market fluctuations.
"We have already shifted an extensive amount of our LCD TV panel production lines to manufacturing lines for IT product-use displays, and some are still in progress," the company said. "We have a solid customer base and differentiated solutions in LCD panels for IT products."
LG Display said it has plans to cope with a possible price decline in LCD panels. Its LCD TV panels account for slightly more than 15 percent of its total revenue. (Yonhap)