Appliances help boost LG profit by 19%

Sales of popular home appliances and televisions offset slumping smartphone sales at South Korea’s LG Electronics, which reported a sharp increase in second-quarter net profits yesterday.

Net income for April to June amounted to 268.5 billion won (Dh875 million, $238.5 million), up 18.6 per cent from a year earlier and 36 per cent from the previous quarter, the Seoulbased company said in a statement.

The company produces a range of products from mobile phones to televisions and home appliances including air conditioners, washers and refrigerators.

Operating profit also rose 140 per cent on-year to 584.6 billion won, while sales inched up 0.6 per cent to 14 trillion won.

The company attributed the growth to robust sales of high-end TVs and home appliances, especially for corporate clients worldwide as well as consumers in European and Asian markets.

Operating profits at the home appliance division grew by 50 per cent on-year, while the TV unit showed a dramatic turnaround from a loss of 82.7 billion won a year ago to operating profit of 356.7 billion won.

Both units also reported operating margins of about nine per cent in contrast to its chronically loss-making handset unit. The handset unit has spent lavishly to promote its latest flagship smartphone called G5 since its launch in April, but racked up an operating loss of 150 billion won as sales sagged.

The company warned of “more competitions ahead” in the third quarter as rivals like Samsung and Apple are expected to roll out new smartphones.