NAIROBI, Feb. 7, 2012 – LG Electronics is set to invest $2.4 billion in research and development of new products this year in the region on the back of record operating profits. The company’s full-year 2011 consolidated revenues reached $48.97 billion.
Despite a 2011 net loss of $391 million, operating profits improved significantly to USD 253 million from $153 million for full-year 2010. LG Electronics Head of Marketing & Corporate Communication for East & Central Africa Mr. George Mudhune said the company will be targeting revenues of $53.8billion this year with plans to invest $1.5billion in capital expenditures and a further $2.4billion in research and development.
“LG will be banking on its 3D and Smart TVs portfolio and the new energy efficient appliances being introduced around the world this year to spearhead the company’s revenue growth” added Mr. Mudhune. The company will also be increasing its focus on high-efficiency air conditioning systems to help drive sales. Quarter-on-quarter revenue growth reflected strong performance in home entertainment and home appliances with improved operating profit in the mobile and TV businesses.
The Home Entertainment business unit shipped a record high 8.8 million flat panel TVs from October to December, increasing revenues 17.6 percent from the previous quarter to USD 5.5 billion. While quarterly sales declined modestly from the 2010 period, a strong 2011 holiday season and more premium product mix led by CINEMA 3D TV resulted in an operating profit of USD 130.9 million in the fourth quarter of 2011. Full-year 2011 home entertainment sales were USD 20.2 billion with operating profit of USD 382 million.
The Mobile Communications business unit improved its position in the fourth quarter with operating profits of USD 10 million and sales of USD 2.42 billion on the strength of premium smartphones such as Optimus LTE (Long Term Evolution). For full-year 2011, mobile communication posted sales of USD 10.55 billion, a decline of 9.9 percent from 2010. Mr. Mudhune emphasized that in 2012, the unit will continue to strengthen its position by focusing on strategic markets with expanded smartphone line-up led by LTE smartphones.
The Home Appliance business unit posted record-high quarterly sales of USD 2.6 billion in the fourth quarter of 2011 with strong growth in Korea, the U.S. and developing countries with more energy-efficient products. Modestly lower operating profit of USD 57 million in the fourth quarter reflected increased raw material costs and unfavorable foreign exchange rates.
Total 2011 home appliance sales were USD 10.03 billion with operating profit of USD 266 million. New energy efficient appliances being introduced around the world this year are expected to contribute to 2012 revenue growth. The Air Conditioning & Energy Solutions business unit reported sales of USD 593 million in the fourth quarter, essentially flat with the 2010 fourth quarter. An operating loss of USD 33 million was attributed to negative macroeconomic issues and product mix weakness in developing markets.
For full-year 2011, the unit recorded air conditioning and energy solutions revenues of USD 4.11 billion and operating profit of USD 52 million. The unit is increasing its focus on high-efficiency air conditioning systems to help drive sales in 2012.
