LG Display Co Ltd Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
LG Display Co Ltd's Q2 2025 earnings call highlighted a shift towards OLED-centered business, despite a sales decline due to seasonal factors and the end of the LCD TV business. The call emphasized improvements in financial structure, cost innovation, and strategic initiatives for future growth in OLED technology and key business segments.
Key Financial Results
Q2 2025 sales decreased by 8% Q-o-Q to KRW 5.587 trillion, and 17% Y-o-Y.
Operating profit posted a loss of KRW 116 billion.
First-half cumulative sales reached KRW 11,652.3 billion with an operating loss of KRW 82.6 billion.
Net income turned positive to KRW 890.8 billion, influenced by improved FX gains and the sale of stake in the Guangzhou LCD plant.
Q2 EBITDA stood at KRW 1.539 trillion, with an EBITDA margin of approximately 19%.
Cash and cash equivalents at the end of Q2 amounted to KRW 1.666 trillion.
The debt ratio stood at 268% and net debt-to-equity ratio at 155%, representing significant decreases of 40 percentage points and 19 percentage points Q-o-Q, respectively.
Business Segment Results
TV revenue accounted for 20% of total sales, down 2 percentage points Q-o-Q.
Mobile and others declined by 6 percentage points Q-o-Q to 28%.
The IT segment recorded 42%.
The automotive segment grew 1 percentage point Q-o-Q to 10%.
The OLED portion of total revenue increased by 1 percentage point Q-o-Q and 3 percentage points Y-o-Y, reaching 56%.
Capital Allocation
CapEx for the year is expected to be in the low KRW 2 trillion range.
New investments will be executed with profitability as the top priority.
The company is maintaining its CapEx strategy centered on future readiness and business structure enhancement.
Total debt reduction target of KRW 13 trillion level achieved early.
Industry Trends and Dynamics
Increasing adoption and larger sizes of in-vehicle displays are positive indicators for future market growth in the automotive segment.
The gaming monitor market is expanding.
Demand for medium-sized panel products are expected to grow slightly this year.
Competitive Landscape
LG Display aims to strengthen its competitive edge in quality and cost for small panels.
The company intends to solidify its leadership in the premium market with a diverse OLED panel lineup.
Competition is expected in the automotive segment.
Macroeconomic Environment
The Korean won, US dollar exchange rate turned stronger.
Ongoing macroeconomic uncertainties and volatility in the trade environment are noted.
Tariff-related uncertainties are growing.
Growth Opportunities and Strategies
Focus on OLED-centered business structure.
Strengthen partnerships with global top-tier market-leading customers in the B2B and high-end sectors based on differentiated high-end LCD technologies.
Address new high-end market demand with Tandem OLED in the medium panel IT OLED segment.
Continue to improve financial structure through cash flow enhancement.
The company will deliver differentiated customer value in the automotive segment through its market position, innovative technologies and product competitiveness.
Financial Guidance and Outlook
Shipment area for Q3 is expected to decline by a low to mid-single-digit percentage.
ASP per area is forecast to increase to mid-20% levels in Q3.
Expect a steep rebound in performance in the second half with broader profit improvements compared to the first half.
The company is committed to turning around into profit for the full year of 2025.
