LG Electronics said on Thursday that its fourth-quarter deficit widened due to losses in its equity ties with a display-making affiliate, while its mobile business remained in the red.
The tech giant said it logged a net loss of $717 million in the October-December period, compared with a KRW 80.7 billion net loss a year earlier, Yonhap news agency reported.
The company’s operating profit increased 34.5 percent on-year to KRW 101.8 billion in the fourth quarter, but this was an 87 percent drop compared to the previous quarter. Sales rose 1.8 percent on-year to KRW 16 trillion in the last three months of 2019.
For the whole of 2019, LG Electronics’ net income tumbled 87.8 percent on-year to KRW 179.9 billion.
Operating profit dropped 9.9 percent on-year to KRW 2.4 trillion, but sales inched up 1.6 per cent on-year to a record KRW 62.3 trillion.
LG Electronics said its equity ties with LG Display hurt its bottom line. The company holds a 37.9 percent stake in the world’s leading OLED panel maker.
Aside from equity losses, LG Electronics saw its mobile business extend a slump to 19 consecutive quarterly losses.
LG Electronics’ mobile business unit posted KRW 332.2 billion in operating loss in the fourth quarter, widening from a loss of KRW 318.5 billion a year earlier. The unit’s sales plunged 21.2 percent on-year to KRW 1.3 trillion.
For all of 2019, its mobile business had sales of KRW 5.9 trillion, down from KRW 7.9 trillion in 2018, while operating loss was tallied at KRW 1.01 trillion, also widening from KRW 789 billion in 2018.
Analysts predict that LG Electronics shipped only 29 million smartphones in 2019, down 28 percent from a year earlier.
“Sluggish sales of mass-tier smartphones in overseas markets, increased marketing expenses and retail inventory adjustments led to operating loss in the mobile business,” the company said.