LG Display said on Wednesday that it loses its first-quarter operating profit fell 95 percent from a year earlier. The company said its first-quarter operating profit was 40 billion won ($34.43 million), decrease of 34% from its fourth-quarter operating profit in 2015.
LG Display announced its sixteenth straight quarterly operating profit at KRW 40 billion, which resulted from a thorough and profit-focused management based on differentiated technologies in response to a difficult market situation caused by panel oversupply and falling panel prices.
To deal with the difficult market situation, LG Display reduced the manufacturing of TV panels of 30-inches and below, which faced a large fall in prices, while expanding production of 40-inch range TV panels and those of 60-inch and above. The company also increased profitability by focusing on premium differentiated products based on M+ technology and maximized production efficiency in its overall operations by flexibly allocating production between IT product panels and TV panels.
Panels for TVs accounted for 38% of the revenue in the first quarter of 2016, tablets and notebook PCs for 24%, mobile devices for 23%, and desktop monitors for 15%.
With 77% in the liability-to-equity ratio, 153% in the current ratio, and 15% in the net debt-to-equity ratio as of March 31, 2016, the financial structure of the company remains stable.
LG Display will continue to increase profitability by concentrating on premium products such as Ultra HD TV panels based on its M+ technology to respond to a growing demand for large-size TVs, and make efforts to maximize efficiency by improving the manufacturing process in the second quarter of 2016.
"Panel shipments in the second quarter of 2016 are expected to increase by a mid-single digit percentage compared to the first quarter," Chief Financial Officer Don Kim said in a statement. The firm also expects panel prices to stabilize due to global sports events and an increase in new product shipments.
