LG Display to downsize facilities investment to around 2 trillion won this year

LG Display reported its first profit in seven quarters on increased demand for OLED (organic light-emitting diode) panels for mobile and TVs.

Models present LG Display's new OLED TV panel at CES 2024. [LG DISPLAY]

LG Display pledged to invest between 2 to 3 trillion won ($2.4 billion) in facilities this year, a drop from last year's 3.6 trillion won, according to the panel maker's conference call Wednesday.

"This year, under the goal of achieving financial stability, we plan to make 2 trillion won-level facilities investments focusing on maintenance and client projects," said Kim Sung-hyun, chief financial officer (CFO) at LG Display in a conference call.

"Last year, we invested 3.6 trillion won, 1.6 trillion won less than 2022."

The company said it will raise 1.4 trillion won by issuing new shares, approximately 28 percent of which will be spent on paying back debt. The company aims to lower its debt ratio from 308 percent last year to 260 percent level this year.

Facilities investment, including factory expansion, for organic light-emitting diode (OLED) panels for laptops and tablets will total 416 billion won. The remaining 622 billion won will be spent on raw materials to make OLED panels for global clients.

"There could be discontent from the stock market, but in a bigger picture, we are going towards regaining market confidence," the CFO said.

When LG Display announced its new stock issuance in December, its share price dropped by more than 7 percent.

LG Display reported its first profit in seven quarters on Wednesday on increased demand for OLED panels for mobile and TVs during the Oct.-Dec. period.

The Apple supplier posted 132 billion won of operating profit in the fourth quarter of 2023, compared to 876 billion won of loss in the previous year. It hovered over a market consensus of 121 billion won compiled by FnGuide.

Its revenue came to 7.4 trillion won, a one percent increase from last year's 7.3 trillion won.

LG Display struggled last year due to market downturn amid an aggressive influx of Chinese players armed with cheap prices. The large LCD panel market for TVs has been nearly entirely engulfed by Chinese companies while small and midsized OLED panels for laptops and tablets were already dominated by Samsung Display.

LG Display accumulated 21.3 trillion won of revenue in 2023, 18.4 percent down from 2022. Operating loss expanded by 20.4 percent to 2.5 trillion won in 2023 compared to 2022.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]