LG Electronics reported another huge loss in its troubled mobile division in Q4 2020, citing sluggish premium handset sales and confirming it was closely reviewing its future in the smartphone segment.
The electronics giant’s Mobile Communications unit booked a loss of KRW248.5 billion ($222.9 million), which was actually an improvement on Q4 2019 when it lost KRW332 billion. Revenue was KRW1.4 trillion, up almost 5 per cent year-on-year.
In its earnings statement, the company said the unit suffered from a shortage of 4G chips and “sluggish” sales of premium handsets.
Looking ahead it noted although global demand for smartphones was expected to increase during 2021, partly driven by 5G, “competition is expected to be intensified”.
LG Electronics went on to confirm reports from South Korean media earlier this month stating a review was underway into the future of its mobile division, with speculation it may quit the market altogether.
The company noted it would “closely review the direction of the business by objectively considering our current and future competitiveness and share our business direction once it is determined”.
Mobile Communications was its only segment to incur large losses, though its Vehicle Solutions unit was also in the red, with a loss of KRW2 billion on revenue of KRW1.9 trillion.
As a whole, LG Electronics made a net profit of KRW262.3 billion compared with a KRW850 billion loss in Q4 2019.
Following the company’s Q4 results call earlier today (29 January), Nikkei Asian Review reported LG Electronics planned to use some of the technology developed by its mobile division in its home appliances and electric vehicle innovations even if it quits the smartphone market.Subscribe to our daily newsletter Back