LG Display Co, LtdLPL reported a third-quarter FY22 revenue decline of 6% year-on-year to KRW 6.77 trillion.
Operating loss was KRW (759) billion. The EBITDA decreased 76.9% Y/Y to KRW 391 billion.
The unprecedented decline in set and panel demand, coupled with all-time-low LCD panel prices during the year’s second half, mainly affected the company’s well-noted mid-sized and premium TV panel businesses.
Tech gadget makers made significant cuts to inventory, and consumer sentiment in Europe, a critical sales region for OLED TVs, worsened rapidly due to the Russia-Ukraine war and energy crunch, Reuters reports.
LPL plans to cut its 2022 investment budget by more than KRW 1 trillion and flexibly operate its OLED production lines to match demand.
LPL looks to focus on high-end LCD products and OLED.
LPL will also expand its differentiated products, like gaming OLED displays and ultra-large OLED panels of 65 inches and higher.
It will advance its plan to exit domestic production of LCD TV panels while gradually reducing output in China.
LCD panel prices stabilized in October thanks to production adjustments by panel makers. Still, LG Display is expected to extend losses into the current quarter because of weak demand, the report cited Jeff Kim of KB Securities.
“Under the conservative stance that poor management performance may be prolonged…we will accelerate our exit from the LCD TV sector,” said LG Display CFO Sunghyun Kim told analysts.
LPL derived around 9% of its revenue in the third quarter from LCD TVs.
The report added that LG Display has been in the red since the second quarter when it logged its first quarterly operating loss in two years as a pandemic-driven demand boom for home entertainment devices ended abruptly amid rising inflation and interest rates.
Price Action: LPL shares closed lower by 3.04% at $4.78 on Tuesday.
