Relocation of smartphone factories to Vietnam reduces LG's losses
SEOUL, AJU - The relocation of smartphone production facilities to Vietnam apparently played a role in reducing losses in LG Electronics' mobile communication division and boosting overall sales in the third quarter of this year.
In an earnings guidance, LG said Monday that its operating profit in the July-September period is expected to stand at 781 billion won ($652 million), up 4.3 percent from a year ago, helped by robust sales in home appliances and TVs. Total third-quarter sales are forecast to hit an all-time high of 15.7 trillion won, up 1.8 percent.
Due to reduced costs and the relocation of smartphone factories in South Korea to Hai Phong in northeastern Vietnam, LG has seen a considerable drop in losses in its mobile communications division. LG's mobile division posted a second-quarter operating deficit of 313 billion won, marking the ninth consecutive quarterly loss. LG attributed its poor performance to increased marketing costs for its 5G phone, V50 ThinQ,, and lackluster sales of its flagship phones and low-end devices.