LG Electronics Q2 operating profit down 46.6 pc due to rising tariff

Seoul, July 7 (IANS) LG Electronics, a leading home appliance manufacturer in South Korea, said on Monday its second-quarter operating profit is estimated to have plunged over 46 per cent from a year earlier due to rising logistics and tariff costs.

Operating profit for the three months ended in June came to an estimated 639.1 billion won (US$467.2 million), down 46.6 percent from a year earlier, the company said in a regulatory filing.

Its revenue dropped 4.4 percent on-year to 20.74 trillion won. The data for net profit was not available.

The operating profit was 15.2 percent lower than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The company will release its final earnings report later.

LG Electronics attributed the profit decline to persistent unfavourable business conditions in the second quarter, particularly stemming from changes in US trade policy.

The company cited increased tariff costs, including those on steel and aluminium, as well as rising logistics expenses and intensifying market competition, as key factors eroding profitability.

Despite the challenges, LG Electronics' business-to-business (B2B) operations, including electric vehicle (EV) components, subscription services, and heating, ventilation and air conditioning (HVAC) systems, posted solid growth during the quarter.

The company said it will continue to focus on expanding its B2B and subscription-based businesses to strengthen its long-term business fundamentals.

Meanwhile, LG Electronics is joining forces with Saudi Arabia's Shaker Group to develop specialised HVAC systems for scorching climates. The partnership includes universities from both countries to test AI-driven energy efficiency solutions. This comes after LG's recent acquisition of a Norwegian hot water company to expand its European HVAC presence. The collaboration aims to establish climate-specific R&D infrastructure for global markets.

"This collaboration will serve as an opportunity for us to further strengthen our capabilities in HVAC solutions tailored for extremely hot regions," an LG Electronics official said.

—IANS

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