LG Electronics blamed supply disruptions from its Chinese partners for a 34 per cent drop in revenue from its Mobile Communications division in Q1 2020, as the unit continued to weigh on group earnings.

In a statement, the South Korean manufacturer reported sales of KRW998.6 billion ($821.7 million) for its mobile unit, down from KRW1.5 trillion in Q1 2019, attributed to Chinese supply issues. It was also hurt by decreased demand caused by store shutdowns in Europe and Latin America due to the Covid-19 (coronavirus) outbreak.

The company did not break out profit or loss for the division, but added expenses had “been saved through efficient marketing resources management and labour cost reduction from relocation of production sites”.

Looking to the current quarter, the company warned of further woes with market demand expected to “decline significantly” due to the pandemic, with competition among global manufacturers to secure market share expected to intensify.

The company added it was pinning hopes on its upcoming Velvet 5G smartphone launch in its home market to mark a new direction for the division, with a push around online sales to “proactively manage the current difficult conditions”.

Mobile was one of the major dour spots for the company, which at group level swung to a net profit of KRW1.1 trillion from a loss of KRW849.8 billion, fuelled by its home appliances business.

Revenue dipped 1.3 per cent to KRW14.7 trillion, due to softer demand during the Covid-19 pandemic.