South Korean display panel maker LG Display suffered an operating loss of KRW1.36 trillion ($1.1 billion) for the full year of 2019.
LG Display has posted 2019’s fourth-quarter financial figures (from October to December), alongside comparisons against the previous quarter and the same period for 2018 to provide context.
The overall fourth-quarter revenue was $5.37 billion, an increase of 10 per cent against the third quarter of 2019, but a fall of 8 per cent from $5.82 billion in the same period in 2018. Net losses amounted to almost KRW2.9 trillion ($2.44 billion) while revenue fell 4 per cent to KRW23.5 trillion ($19.78 billion).
This large increase in operating losses reflects the inclusion of KRW1,600 billion ($1.34 billion) of what is termed “asset impairment”. This essentially represents tangible assets such as land, building, and production facilities where the recoverable amount is smaller than book value and the company records the gap as a loss.
In this case, LG Display is stating the asset impairments are from the company’s decision to withdraw from the OLED Lighting business plus the unfavourable circumstances for P-OLED business compared to when the initial decision on the investment was made. The remaining losses are due to increased costs.
For the fourth quarter, LG Display reported an operating loss of KRW422 billion ($360 million), going from being in the black into the red over the span of a year. The steep decline was caused by the downturn in the LCD market coupled with restructuring costs. Profitability was further aggravated by increased costs for the production of plastic OLEDs aimed at mobile devices, the company said.
Also in the fourth quarter, LG Electronics appointed a new CEO and numerous senior leaders on November 28 after the announcement of a 30 per cent drop in net profit. Brian Kwon, head of LG’s mobile and TV divisions, took the helm as chief executive since December to accelerate the company’s digital transformation and improve its earnings. However, business result in this quarter did not report any improvement.