South Korea’s LG Electronics Inc. has become the world’s top name in white goods, earning 11.6 trillion won ($9.8 billion) in home appliance sales in the first half of this year.

According to the company’s earnings result disclosed in a regulatory filing on Tuesday, the company’s home appliance division posted an operating profit of 717.5 billion won on sales of 6.1 trillion won in the second quarter ended June. Income fell 1.4 percent from the previous quarter, but sales were up 11.7 percent to best-ever quarterly number.

For the first six-month period, the company raked in 1.4 trillion won in operating profit on sales of 11.6 trillion won in the first half of this year ended June.

During the same period, Whirlpool sold $9.95 billion – or 11.4 trillion won in the Korean exchange rate versus the U.S. dollar and slightly below LG Electronics’ 11.6 trillion won.

Due to its dominance in the premium market, LG outrivals the U.S. household name in profitability. Its operating margin averaged 12.5 percent in the first half, more than doubling Whirlpool’s 4.56 percent over the same period.

Regardless of its strength in home appliance division, LG Electronics confirmed a near 30 percent fall in operating profit on a consolidated basis in the second quarter against the previous three-month period due to losses in its mobile and TV businesses from intensifying competition.

The electronics maker’s operating income for the second quarter was at 652.2 billion won, down 27.6 percent from the previous quarter and 15.4 percent from a year ago. Sales were 15.6 trillion won, up 4.8 percent on quarter and 4.1 percent on year.

The company’s operating profit in the first half of this year reached 1.6 trillion won on sales of 30.5 trillion won, down 17.3 percent and up 1.3 percent on year, respectively.

The figures were in line with the company’s earlier guidance.

Shares of LG Electronics on Wednesday lost 3.26 percent to 65,300 won in Seoul.

The mobile communication division saw operating loss for the second quarter widen to 313.0 billion won from the previous quarter’s 203.5 billion won despite a 6.8 percent growth in sales to 1.6 trillion won over the same period. It was the 17th consecutive quarter for the division to book an operating loss.

The company said its first 5G smartphone – LG V50 ThinQ – fared well but resulted in greater operating loss due to rising marketing expense and a one-off cost for moving the smartphone assembly lines to Vietnam.

The home entertainment division, responsible for TV business, saw its operating profit shrivel 40.7 percent to 205.6 billion won from the first quarter due to higher marketing costs and a weaker Korean won. Sales came at 3.7 trillion won, down 8.8 percent from previous quarter’s strong results.

Its vehicle component solutions division posted an operating loss of 55.8 billion won on sales of 1.4 trillion won. The company said revenue improved 6 percent from the first quarter driven by higher demand from major auto original equipment makers for electric vehicle components, but its profitability contracted due to initial production costs of new projects.

LG Electronics in a conference call after earnings release said it plans to focus on expanding sales of premium appliance products and strengthening risk management, as it expects greater pressure from global trade uncertainties.

By Kim Gyu-sik and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]