LG Corp (003550) Q3 2024 earnings summary

Executive summary

• Consolidated revenue for 3Q24 was KRW 5.4T, down 0.3% YoY, with increased subsidiary revenues offset by lower equity method gains; consolidated operating profit was KRW 1.2T, down from KRW 1.59T in the prior year.

• Net income attributable to controlling interests was KRW 966.4B, with basic EPS of KRW 6,235 for common shares.

• The holding company’s main income sources are dividends, trademark royalties, and rental income from subsidiaries and affiliates.

• Separate revenue fell 11% YoY to KRW 0.8T, with dividend income down 20% YoY and royalties flat; rental revenue rose 6% YoY.

• Separate operating profit dropped 14% YoY to KRW 0.6T, reflecting the revenue decline.

Financial highlights

• Assets increased by KRW 0.3T and equity by KRW 0.6T compared to 4Q23; liabilities decreased by KRW 0.3T.

• Cash and cash equivalents at period-end were KRW 1,406.9B; cashable assets on a standalone basis at end-3Q24 were KRW 1.5T.

• Dividend income for 3Q24 was KRW 432.1B (down 20% YoY), royalties KRW 260.7B (flat YoY), and rental revenue KRW 107B (up 6% YoY).

• Major subsidiaries contributed significantly, with LG CNS posting KRW 3,958.4B in sales (+7% YoY) and LG Chem reporting KRW 36,579.5B in sales.

• Operating margin for the period was 22.4%, with net margin at 17.9%.

Outlook and guidance

• Dividend policy targets payout of over 50% of separate net income (excluding non-recurring income); 2023 payout ratio was 67%.

• Non-recurring income may be used for share buybacks to enhance shareholder value.

• Focus on balancing shareholder returns and growth investments, with future investments planned in AI, software, bio/healthcare, and clean tech.

• The group expects gradual improvement in profitability in petrochemicals and advanced materials in Q4, driven by lower raw material costs and increased plant utilization.

• Battery and IT service segments are expected to maintain growth momentum, while telecom and home appliance markets remain competitive.