SEOUL, Korea (Apr. 25, 2018) – LG Display reported today unaudited earnings results based on consolidated K-IFRS (International Financial Reporting Standards) for the three-month period ending March 31, 2018.
- Revenues in the first quarter of 2018 decreased by 20% to KRW 5,675 billion from KRW 7,062 billion in the first quarter of 2017 and decreased by 20% from KRW 7,126 billion in the fourth quarter of 2017.
- Operating loss in the first quarter of 2018 recorded KRW 98 billion. This compares with the operating profit of KRW 1,027 billion in the first quarter of 2017 and the operating profit of KRW 45 billion in the fourth quarter of 2017.
- EBITDA in the first quarter of 2018 was KRW 812 billion, compared with EBITDA of KRW 1,743 billion in the first quarter of 2017 and with EBITDA of KRW 930 billion in the fourth quarter of 2017.
- Net loss in the first quarter of 2018 was KRW 49 billion, compared with the net income of KRW 679 billion in the first quarter of 2017, and the net income of KRW 44 billion in the fourth quarter of 2017.
LG Display recorded KRW 5,675 billion in revenues in the first quarter of 2018, a year-on-year decrease of 20% from KRW 7,062 billion due to weak demand in panels from low seasonality and to a continued decline in panel prices. Indeed, the LCD panel prices declined more than expected in the first quarter due to set makers’ conservative purchasing strategy amid growing expectation of an increase in panel supply from Chinese panel makers.
However, with demand in OLED panels on the rise, the company has seen a continuous increase in revenues from its OLED TV panels and an improvement in profitability thanks to R&D efforts, which means that LG Display’s strategic shift toward an OLED-focused business structure is on course.
Despite the improvement in OLED profitability, the company registered KRW 98.3 billion in operating loss in the first quarter due to the decline in LCD panel prices and an unfavorable exchange rate.
Panels for TVs accounted for 43% of the revenue in the first quarter of 2018, mobile devices for 22%, tablets and notebook PCs for 19%, and desktop monitors for 16%.
LG Display recorded 102% in the liability-to-equity ratio, 104% in the current ratio, and 22% in the net debt-to-equity ratio as of March 31, 2018. The increased ratios of the liability-to-equity and the net debt-to-equity compared with the previous quarter were mainly due to the borrowings made in advance for the strategic shift toward a more OLED-focused business structure. These borrowings were also in response to anticipated increase in global interest rates.
“The market situation has changed more rapidly than expected, though all changes are within the range we had prepared for. Based on our scenarios, we will be focusing on efficient and flexible management in capital expenditure and maintaining operational performance including intensified cost reduction,” said Don Kim, CFO of LG Display. “Panel area shipments are expected to grow starting from the second quarter, as the upward trend to larger-size panels continues in time for major sporting events. In addition, demand for large-size OLED panels is expected to remain strong, while LCD panel prices are expected to stabilize during the second quarter.”
He added, “Given the company’s strategy of shifting to an OLED-focused business structure, we will continue to focus on differentiated products such as Crystal Sound OLED (CSO) and Wallpaper OLED panels.”
Earnings Conference Call
LG Display will hold a bilingual conference call in English and Korean on April 25, 2018 starting at 10:00 a.m. Korea Standard Time to announce the first quarter of 2018 earnings results. Investors can listen to the conference call via https://events.arkadin.com/ev/APAC/kr/lgd18q1webcast
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Additional information as to factors that may cause actual results to differ materially from our forward-looking statements can be found in our filings with the United States Securities and Exchange Commission.