hankyoreh

LG’s offices in Seoul’s Yeouido neighborhood (Yonhap News)

LG Electronics recorded an all-time high of 74 trillion won in sales last year, surpassing US electronics giant Whirlpool to become the world’s top producer of home appliances.

LG Electronics announced on Thursday that it made an operating profit of 3.86 trillion won by generating a total of 74.72 trillion won (approximately US$61.9 billion) in revenue last year. Sales rose 28.7% year-on-year, but operating profit fell 1.1%.

This is the first time that LG Electronics’ annual sales exceeded 70 trillion won. The company attributed its record figures to “strong sales of premium home appliances and OLED TVs,” adding that “about 60% of sales, or 44 billion won, came from LG’s home appliance and air solution and home entertainment divisions.”

The company’s home appliances and home entertainment divisions greatly helped in protecting business profits. The two areas recorded operating profits of 2.22 trillion won and 1.99.8 trillion won, respectively.

However, even though 2021 fourth-quarter household appliances sales reached 6.52 trillion won, operating profit topped out at 157.1 billion won. Sales were highest in the fourth quarter, but operating profit was down 44.8% compared to the same period in 2020.

“Increases in costs due to an increase in raw material prices and an increase in logistics costs played a major role,” LG explained.

Whirlpool, on the other hand, announced that it had recorded $21.98 billion in sales last year. Whirlpool is an American electronics company that has competed with LG Electronics for the No. 1 spot in the global home appliance market. If calculated in won, Whirlpool’s total sales last year came to around 25 trillion won — 2 trillion won less than LG Electronics' household appliances sales of 27 trillion won in 2021.

Last year, LG Electronics’ vehicle component and business solutions divisions recorded 7.19 trillion and 6.96 trillion won in sales, respectively — up 23.97% and 15.78% from the previous year. However, the company’s vehicle component division recorded an operating loss of 932.9 billion won.

This is the result of setbacks in the automotive sector due to a shortage of semiconductors for vehicles as well as the cost-sharing burden for LG as a result of recalling Chevrolet Bolt electric cars due to the risk of their batteries catching fire. The total cost of that is upwards of US$1 billion, but LG’s share of the burden has yet to be finalized.

In a phone call with the Hankyoreh, a source at LG Electronics said, "Financial provisions related to the Bolt recall were reflected in the results of the second and third quarters of last year, and not in the financial statements for the fourth quarter."

By Sun Dam-eun, staff reporter

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