(Seoul = Yonhap News) Reporter Lee Ji-heon = Korea Credit Rating is LG Electronics[066570]The company announced on the 6th that the decision to discontinue its smartphone business is expected to have a positive effect on creditworthiness.
In this report, Lee Joo-ho, an analyst at the Corporate Evaluation Division, said in the report, “Strengthening core business competitiveness through internalization of business capabilities such as smartphone-related technologies, relocation of manpower, strong sales of TV, home appliances, and automotive parts (VS), which are the main business areas, will continue to grow. In this case, as the fixed cost burden eases rapidly, it is expected that the trend of improving profit-generating output will continue.”
He added, “It is expected that the use of production facilities in the smartphone division will be able to maintain an improvement in financial stability through the effect of reducing equipment investment by preventing duplicate investment in each remaining business division in the future.”
The report concluded that “the suspension of the smartphone business due to its poor business competitiveness is expected to further enhance the stability of operating performance due to the effect of the portfolio.”
However, the report diagnosed that the effect of improving profits in the short term may not be significant in the short term as fixed costs continue to occur due to the remaining manpower and production facilities, while sales are expected to decrease by 5 trillion won per year due to the suspension of the smartphone business.
(Seoul = Yonhap News) Reporter Park Dong-joo = LG Electronics finally decided to end the mobile business on the 5th. The photo shows an LG Electronics smartphone displayed in an LG Electronics store in Seoul on that day. 2021.4.5 [email protected]
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2021/04/06 16:21 sent