The LG Air Conditioning Company saw sales decreased six percent (15 percent growth on a USD base) year-over-year to KRW 1.2 trillion (USD 1.0 billion) and operating profit came at KRW 43 billion (USD 38 million). Growth led by emerging markets is expected as the peak season approaches and the global economy continues to recover.
The LG Business Solutions Company recorded a strong increase in sales of 15.4 percent year-over-year with sales reaching KRW 1.3 trillion (USD 1.1 billion) on stronger demand for IT products and solid demand in emerging markets. Sales of car infotainment products grew with the recovery of the automobile market and monitor sales also picked up, especially in Europe and South and Central America.
Financial Statement and Non-operating Items
Net profit for the first quarter of 2010 rose significantly to KRW 675 billion (USD 590 million), compared to a loss of KRW 200 billion (USD 142 million) a year earlier. Equity method gain of KRW 219 billion (USD 191 million) from affiliates helped push up net profit. In particular, LG Display booked an equity method gain of KRW 230 billion (USD 201 million).
LG adopted the International Financial Reporting Standards (IFRS) in 2010 with the objective of unifying its global accounting and financial reporting standards. The 104 subsidiaries of which LG owns more than 50 percent of voting shares have been consolidated under IFRS, including overseas subsidiaries and LG Innotek. As a result, LG Display, in which LG Electronics owns a 37.9 percent stake, will no longer be consolidated in LG Electronics' earnings results.
2010 2Q Business Direction and Prospects
The company expects to see growth in the second quarter of 2010 with the global economic recovery and the start of the high season for air conditioning business. LG will continue to introduce new products in major categories including smartphones, invest aggressively in R&D and marketing and develop premium products in order to secure its position in respective categories.
2010 1Q Exchange Rates Explained
Amounts in Korean Won (KRW) are translated into US Dollars (USD) at the average rate of the three month period in each corresponding quarter: KRW 1,145 per USD (2010 1Q) and KRW 1,409 per USD (2009 1Q).
