LG Display, surplus for two consecutive quarters… Up the main track to improve the constitution

▲ LG Display’s Guangzhou OLED panel factory. ⒸLG Display

LG Display succeeded in improving its constitution as it turned to a surplus from the second half of last year. In 4Q, the financial structure is also improving, recording an’earning surprise’ that significantly exceeded market expectations.

On the 27th, LG Display announced that it recorded 7,461.2 billion won in sales and 6854 billion won in operating profit in the fourth quarter of last year. Sales grew 16% year-on-year, and operating profit turned to black.

Accordingly, LG Display succeeded in achieving a surplus for two consecutive quarters following the third quarter of last year. Operating profit recorded in the second half reached 850 billion won. The annual operating loss was 29.1 billion won, a significant decrease from 1.359.3 billion won last year.

LG Display explained, “Even in the fourth quarter, performance increased due to strong demand for TV and IT products and increased shipments of large OLEDs and P-OLEDs due to the spread of home culture due to Corona 19.”

According to the actual market research company Omdia, the average price of a 50-inch ultra-high definition (UHD) LCD panel for TV this month was $156, and has been on the rise for eight consecutive months since last June. Compared to January of last year, it increased more than 80%.

The rise in LCD prices can be interpreted as a lack of supply of LCD panels as TV demand increases as the amount of time spent at home increases while refraining from going out in the aftermath of Corona 19. In the third quarter of last year, global TV shipments were 62.5 million units, recording a record high based on quarterly shipments. This served as one of the reasons LG Display extended the production of LCD panels for domestic TVs, which it decided to end last year.

At the same time, LG Display has achieved results in all three key tasks, such as ▲ large OLED trending ▲ P-OLED business turnaround ▲ acceleration of LCD structure innovation.

With the Guangzhou OLED plant in full operation from the third quarter of last year, the P-OLED business also achieved meaningful profit and loss by increasing supply to Apple.

Seong-ryul Kwon, a researcher at DB Financial Investment, said, “LG Display is getting better after its turnaround in the third quarter of last year.” “P-OLED has entered the profit stage due to the increase in the number of strategic overseas customers, and TV, monitor, and “This is because all of the notebook panels had good profitability.”

As operating profit improved, EBITDA recorded KRW 1.774.3 trillion, and EBITDA margin reached 24%, the highest level in the 15th quarter.

LG Display’s financial structure has also improved thanks to the successive surplus.

As of the end of last year, the amount of cash held was 4.29 trillion won, an increase of 27.6% compared to the same period last year. This is the first time that cash has exceeded 4 trillion won. In one year, the debt-to-equity ratio decreased by 10%p to 175%, and the portion of net debt also improved by 4%p to 77%. The current ratio also increased 8%p, exceeding 100%.