LG Electronics Q1 operating profit down due to rising costs

LG Electronics' headquarters in Seoul / Yonhap

LG Electronics said Monday its first-quarter operating profit is estimated to have decreased 5.7 percent from a year earlier due to rising logistics costs.

Operating profit for the three months ending in March came to an estimated 1.25 trillion won ($856.7 million), down 5.7 percent from a year earlier, the company said in a regulatory filing.

Its revenue increased 7.8 percent on-year to 22.74 trillion won, surpassing the 22 trillion-won level for the first time in any first quarter.

The operating profit is 6.2 percent lower than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The company said its operating profit went down due to a rise in shipping costs.

However, its business-to-business (B2B) sectors, including electric vehicle components, subscriptions and heating, ventilation and air conditioning (HVAC) businesses, contributed to its steady growth in sales.

The flagship home appliances business also showed a solid performance, it added.

"Despite escalating uncertainties, we pulled off record high quarterly sales in the first quarter thanks to 'quality growth' in B2B, subscription and direct-to-consumer businesses," LG Electronics said in a statement.

The South Korean home appliance giant has made constant efforts to diversify its business portfolio and become a future-oriented company after withdrawing its smartphone business in 2021.

The company will release its final earnings report later. (Yonhap)