LG Innotek Releases Q4 2015 Earnings Results

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LG Innotek Co., Ltd. (CEO Jong-Seok Park) posted sales of 1,590.9 billion KRW and a profit of 45.1 billion KRW in the fourth quarter of 2015 based on the Korean-International Financial Reporting Standards (K-IFRSs). Sales increased by 2.1% and the operating profit decreased by 25.7% from the previous quarter. However, sales decreased by 12.3%, and profit decreased by 22.3% from the year-ago quarter.

LG Innotek posted sales of 6,138.1 billion KRW and a profit of 223.7 billion KRW in 2015. This is a 5.1% and 28.8% decrease respectively from last year.

As a company representative commented, “Slowing growth in the smartphone market led to a decreased demand for smartphone components last year and global competition became more intense. The business environment was not favorable for the company, but new growth engines, including automobile electrical components, have grown steadily.”

This year, LG Innotek plans to diversify clients and products in its core businesses, including automobile electrical components and camera modules. Also, it plans to carry out activities, such as finding and developing new businesses, in preparation for rapid market changes in the future.

Performance by business division

Optics Solution Business unit posted sales of 831.1 billion KRW, which is a 7% increase from the previous quarter, thanks to a sales increase in the Chinese market and in camera modules featuring 12 megapixels or more and optical image stabilization (OIS) camera modules. This sales volume is an 11% decrease compared to the fourth quarter of last year.

Substrate & Material Business unit posted sales of 358.3 billion KRW, which is a 3% decrease from the previous quarter, after withdrawing from the lead frame business, which became a marginal business, and the inventory management of its clients. This sales volume is a 15% decrease compared to the fourth quarter of last year.

Automotive Components and Electronics Business Unit posted sales of 180.5 billion KRW, which is a 11% increase from the previous quarter, due to the supply of new models for Korea and North America including steering and braking motors and automotive cameras. This sales volume is a 25% increase compared to the fourth quarter of last year.

LED Business Unit posted sales of 178.1 billion KRW, which is a 6% decrease from the previous quarter, due to a decrease in demand for the LEDs for TV backlight units (BLUs) and a decrease in product prices due to increasing competition in the market. This sales volume is a 19% decrease compared to the fourth quarter of last year.