Korea’s LG Display, DSME to opt for more orders to boost earnings

Jeong Ho-young, chief executive officer at LG Display [Photos provided by LG Display]

South Korean display manufacturer LG Display Co. on Tuesday unveiled plans to engage more in order-based projects to improve its earnings that have been affected by weak demand and a drop in panel prices.

“We have been focusing on enhancing our business structure based on the perception that it is essential to make preemptive and strategic choices on the focusing areas and to have key backing capacities for steady growth and creation of stable profit,” Jeong Ho-young, chief executive officer at LG Display, told shareholders in a meeting at LG Display Learning Center in Paju, Gyeonggi Province. “We plan to accelerate such a move.”

LG Display has been struggling with sluggish demand and a plunge in panel prices. As part of efforts to overcome the challenges, the company said it will focus more on order-based projects.

LG Display plans to raise the share of revenue from order-based projects to 70 percent over the next two to three years, up from 11 percent in 2019. The projects tend to be less affected by economic and market variants as the company can operate based on contracts with customers.

“We will realign the operation system of supply-based projects that are sensitive to the market changes,” the CEO said. “We will also enhance our presence in the premium TV market in the large-size organic light emitting diode (OLED) sector.”

Shareholders approved four agendas at the meeting, including the approval of LG Display’s financial statement. Jeong was re-appointed as an inside director while Seoul National University Professor Oh Jung-suk and Korea Advanced Institute of Science and Technology Professor Park Sang-hee newly joined the board as outside directors.

The cap on director paychecks was lowered by 1.5 billion won ($1.15 million) to 4.5 billion won, taking into account the projected expenditures based on this year’s earnings.

Daewoo Shipbuilding & Marine Engineering logo [Courtesy of DSME]

Korea’s major shipyard Daewoo Shipbuilding & Marine Engineering Co. also invited shareholders to a meeting on Tuesday and expressed confidence about the company swinging to profit this year.

“We expect many challenges this year but DSME employees will try to swing to profit as fast as we can based on our high-profitability orders,” said Park Du-seon, the company’s CEO. “We have hit above our target orders for two consecutive years now and have secured more than three years of work.”

DSME projects liquefied natural gas (LNG) carrier orders to help improve its earnings.

“Last year, we won a record 38 LNG vessel orders,” Park said. “The trend is likely to continue this year.”

With regards to Hanwha Group that is acquiring DSME, Park said that he expects the takeover to help improve financial structure and create business synergy.