LG targets KRW 3 trillion in cost savings February 10, 2009
Posted by aikservices in Cost Cutting, Korea, LG Electronics.Tags: Cost Cutting, Korea, LG Electronics
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LG Electronics announced efforts to weather the world economic slowdown, including plans to reduce its costs by KRW 3 trillion. Despite the weaker demand, LG said it will continue to invest, and may even raise its spending, on R&D and marketing. The company has intensified its efforts to increase market share despite the volatile economic situation. To achieve this, LG has reorganized its business portfolio to focus on areas with longer-term growth potential and profitability. Partnerships will continue to be a key element of the company’s marketing activities to elevate its brand position.
LG will continue to invest in future growth engines such as solar power, commercial air conditioners and business (B2B) solutions, all sectors LG expects will expand and become increasingly profitable once the economy is back on track. At the end of 2008, LG Electronics established a Crisis War Room (CWR) to bring together LG’s five business units, eight regional headquarters and executives to implement and manage the company’s business plan. In three months, the CWR has identified and developed 11 key action items. Business units have been instructed to establish task force teams to take responsibility for managing the cost-saving initiatives. The company-wide cost-cutting initiative also applies to manufacturing and indirect costs. Globally, LG has been working to further improve its procurement system, which includes everything from raw materials to investment in facilities, financial services and recruitment. LG’s efforts to improve its cash flow has already resulted in reduced inventory, increased liquidity, optimized supply chain management and a more consolidated, efficient purchasing process overall, the company said.
LG Electronics swings to 4th quarter net loss January 27, 2009
Posted by aikservices in Financial, LG Electronics, Mobile, Telecom, Wireless.Tags: Financial, LG Electronics, Mobile, Telecom, Wireless
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LG Electronics Inc., a major manufacturer of mobile phones and flat screen televisions, swung to its first net loss in seven quarters, hit by falling prices for TVs and a hefty price-fixing fine slapped on its affiliate LG Display. The company painted a pessimistic outlook for 2009, saying Thursday it expects both sales and profitability to decline this year because of waning demand.LG Electronics lost 671.3 billion won ($487.2 million) in the three months ended Dec. 31, according to a regulatory filing. It recorded a net profit of 621.3 billion won a year earlier. Quarterly sales rose 12.2 percent to 6.59 trillion won from 5.87 trillion won.
The loss was the company’s worst ever on a quarterly basis, according to spokeswoman Judy Pae.A bright spot for the company, which also makes household appliances and personal computers, was an 8 percent increase in shipments of mobile phones to 25.7 million, LG said in a release. That pushed its 2008 handset sales to a record 100.7 million, up from 80.5 million in 2007.
LG Reports Record Quarterly Loss – Sees Tough Year Ahead January 23, 2009
Posted by aikservices in Asia, Financial, LG Electronics, Mobile, South Korea, Telecom, Wireless.Tags: Asia, Financial, LG Electronics, Mobile, South Korea, Telecom, Wireless
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South Korea’s LG Electronics has swung to a record fourth quarter loss on slowing handset and flat-screen sales – and warned that it sees little upside for the rest of 2009. The firm reported a net loss of KRW 671 billion (US$493 million) on sales of KRW 6.59 trillion (US$4.84 billion).LG’s mobile phone division reached a company high of KRW 4.49 trillion (US$3.3 billion) in sales, 34.6% higher than a year earlier. Handset sales accounted for KRW 4.09 trillion (US$3.0 billion), up 40.3% YoY and 16.5% QoQ.
Shipments of handsets recorded 8% growth YoY to 25.7 million, which resulted in a record 100.7 million units being sold in 2008 versus 80.5 million units in 2007. Operating profit margin declined 8.8% YoY and 11.5% QoQ to 5.2% in the handset division due to increased marketing to minimize year-end inventory.
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