LG Display continued its surplus in the fourth quarter following the third quarter of last year, reducing annual operating losses by more than 1.3 trillion won in one year. With the prolonged COVID-19 outbreak, sales of organic light-emitting diodes (OLED) panels for TVs increased and sales price flow improved, leading to a significant decrease in the deficit.
On the 27th, LG Display announced that it recorded an annual operating loss of 29.1 billion won last year. This is a decrease from the expected operating loss of 4,08 billion won in securities prices, and is down by more than 1.3 trillion won from 1.359.4 billion won in 2019. Last year’s sales were 24,230 trillion won, a 3.2% increase from the same period last year. This is also a figure that exceeds the second half of the 23 trillion won range, which is the stock price earnings forecast.
On a quarterly basis, LG Display also improved its earnings significantly. In the fourth quarter of last year, LG Display recorded sales of 7.461.2 billion won, a 16% growth rate compared to the same period last year. During the same period, the operating profit reached 685.5 billion won, more than twice the market forecast of 310 billion won.
LG Display, which had been in the red for six consecutive quarters from the first quarter of 2019 to the second quarter of last year, succeeded in turning to the black from the third quarter of last year. This improvement in earnings is attributed to the continued strong demand for TV and information technology (IT) products as home culture spreads due to Corona 19. Shipments of large-sized OLED panels mainly used for TVs are increasing significantly, and small and medium-sized plastic OLEDs used in mobiles and automobiles are also steadily increasing. LG Display’s OLED shipment area increased by 5% compared to the previous year and the price per area increased by 12%.
As for the increase in operating profit, it was interpreted that the results of three strategic tasks, such as the popularization of OLED that LG Display has been focusing on, strengthening of the plastic OLED business base, and LCD structure innovation, along with the solid shipment and sales price flow, gradually appeared.
An official from LG Display evaluated that “significant performance improvement was achieved through the expansion of OLED TV panel sales following the full-scale production of the Guangzhou OLED plant and the increase in production based on the stable operation of the plastic OLED business.”
The display industry predicts that the OLED panel market growth will continue this year. According to market research firm Omdia, the global market OLED TV panel shipment from 4.45 million units last year is expected to increase by 52.4% to 6.87 million units this year. Omdia predicts that the global market OLED TV panel shipments will increase to about 12,260,000 units by 2025 following this growth trend.
This outlook is due to the fact that demand in North America, which had been stagnating for a while, has returned to recovery starting in the second half of last year, and set makers that produce OLED TVs are also increasing. In 2013, the only OLED TV makers from LG Electronics have recently increased to 19, contributing to the increase in sales. In the market, the number of OLED TV manufacturers this year is expected to exceed 20, including manufacturers who are proactively considering OLED TV manufacturing as the top premium TV lineup in the future. Currently, LG Display is the only large OLED panel used in TVs in the global market. At the conference call held that afternoon, Chief Financial Officer Dong-hee Seo said, “We will build a solid position with annual OLED TV panel shipments of 7 to 8 million units this year.” Sales may decrease slightly in the year, but the re-recognition of OLED value, which was re-lighted by Corona 19, will be effective even after Corona 19.”
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