Falling panel price strikes LG Display in Q4

By Lee Min-hyung

LG Display has posted 60.62 billion won ($50.49 million) in operating profit for the fourth quarter last year, down 90 percent from the previous year.

The world’s largest display manufacturer said Wednesday that the weak performance is attributable to falling prices due to an oversupply of displays manufactured in China and Taiwan.

LG Display said in a regulatory filing Wednesday that it has posted 7.49 trillion won in sales during the same period, down 10 percent from the same quarter the year earlier. It recorded a net loss of 14 billion won, down from its net income of 389 billion won from a year ago. Sales for LCD panels for TVs took up 34 percent of its quarterly sales, followed by 32 percent for mobile device displays, the company said.

But the company rebounded in terms of yearly performance, posting 1.62 trillion won in operating profit last year, up 20 percent from the previous year.

“Market conditions will remain challenging in the first quarter this year, but we are seeking to tackle the gloomy outlook by focusing on our key capability in producing OLED displays,” said LG Display chief financial officer (CFO) Kim Sang-don in a statement. “We plan to expand investments in establishing OLED manufacturing facilities and continue to prepare for the future by keeping up our technical competitiveness.”

In November, the company said it will invest 1.84 trillion won to build a new OLED manufacturing facility in Paju, Gyeonggi Province. The company said it will put more than 10 trillion won into the project in a move to boost its production of next-generation products such as flexible and transparent displays.

LG Display’s CEO and vice chairman previously said the company will also ship more than 1 million OLED TVs this year, increasing the number to 1.5 million in 2017. In 2015, the company shipped 400,000 OLED TVs.

Despite the weak quarterly performance, LG Display posted an operating profit amounting to more than 1 trillion won for three consecutive years, by launching differentiated product lineups including ultra-high-definition (UHD) TVs and in-plane switching (IPS)-based panels, the company said.

LG Display said it decided to provide its shareholders a cash dividend of 500 won per share.

LG Display closed at 22,800 won on the Seoul bourse, Wednesday, up 4.59 percent from a day earlier.