South Korean tech company LG Electronics Inc. has released its 2020 full-year earnings report. The company’s business performed exceptionally well in a year riddled with supply chain disruptions and economic challenges resulting from covid.
LG’s profit rose 31 percent to set a new record of USD 2.85 billion (Kshs. 313 billion), while annual revenue stood at USD 56.45 billion (Kshs. 6.2 trillion).
The company’s impressive earnings were majorly supported by stellar sales performance in three of its business facets. The company sold lots of premium home appliances, attributed to “increased sales of new appliance categories and the home appliance rental business” in South Korea.
Sales in its premium OLED TVs and vehicle component solutions also helped salvage the company from loss-making categories like smartphones. LG Mobile Communications, which houses its smartphones, made a loss of USD 750.63 million (Kshs. 82.5 billion) in the whole year, tied to “increased marketing investments to support flagship devices.”
The unit’s Q4 sales increased by a minimal 4.5 percent from Q4, 2019. Still, sales contracted 9.2 percent from the previous quarter caused by 4G chipset supply shortages and “sluggish sales” of LG’s premium smartphones in the global market.
LG’s Vehicle Component Solutions arm recorded a full-year loss of USD 1.78 million (Kshs. 195.8 billion). However, the vehicle component arm rebounded slowly from the year prior despite the massive 41.3 percent revenue bump from Q4, 2019 to USD 1.71 billion (Kshs. 188 billion).
Quarterly profit ascended 539 percent year-on-year in the final three months of the year to USD 580.19 million (Kshs. 63 billion). Q4 sales revenue also increased year-on-year and from Q3 2020 but not significantly as the company’s profit.
In 2021, the South Korean tech company bets on AI, 5G, IoT, and mobility to continue its profit-making run. However, like most other companies, it is still concerned about the pandemic and economic recovery.