LG Display announced Friday it has posted an operating loss of 1.35 trillion won ($1.1 billion) in 2019 -- largest in eight years -- going into the red amid ongoing business restructuring efforts.
Overall, the world’s biggest provider of organic light-emitting diode panels posted 23.5 trillion won in sales and 1.36 trillion won in operating loss last year, according to its earnings report for the final quarter of 2019.
Compared to 2018, the annual sales dropped 8 percent, while the operating profit of 92.9 billion won turned into a deficit of over 1 trillion won. The net loss expanded to 2.7 trillion won.
In the fourth quarter alone, the panel maker ended up with a 421.9 billion won operating loss, due to the ongoing business restructuring process that shifts its resources from the money-losing liquid crystal display panel business to large-size OLED and Plastic-OLED businesses.
The fourth-quarter operating loss, however, did show a minor improvement from the loss of 436 billion won in the third quarter, according to the earnings data. The quarterly net loss stood at 1.82 trillion won.
The company said its sales rose 10 percent to 6.42 trillion won in the fourth quarter compared to three months earlier, due to an 18 percent increase in the OLED panel price per square meter.
Of the 1.82 trillion won net loss, 1.6 trillion won was a loss from impairment, a decline in its fair value. Some 1.4 trillion won worth loss incurred from its P-OLED unit, and a 200 billion won loss from pulling out from the OLED lighting market.
“Due to the loss from impairment, the company’s debt-equity ratio has temporarily increased, but it is expected to soon improve. The company thinks that the impairment has reduced uncertainties and variability in the future business (P-OLED),” LG Display Senior Vice President Suh Dong-hee said in a statement.
He added that the company predicts better opportunities in the second half this year, as it will ramp up OLED fab production from its China plant.
The P-OLED business will also start to show better performance starting this year as the company has secured demand from the automobile and smartphone markets.
In the meantime, the company announced that it has already started halting some of its domestic main production lines for its eighth-generation LCD. The company added that it will completely stop its domestic production of LCD TV by the end of this year.
Korean LCD players, including Samsung and LG Display, have suffered lower global market share due the continued decline in LCD panel prices following competition from Chinese rivals. Both companies are currently taking measures to cut supplies.
By Shim Woo-hyun (firstname.lastname@example.org)