LG Philips sees strengthening LCD market, posts Q2 profit
Peter Clarke
EE Times
(07/11/2005 7:01 AM EDT)
LONDON — Leading LCD maker LG Philips LCD (Seoul, South Korea) reported that its sales increased in the second quarter of 2005 by 12 percent to 2,308 billion won (about $2.23 billion) from sales of 2,064 billion won (about $2.00 billion) in the first quarter of 2005 and down 1 percent compared to 2,332 billion won (about $2.25 billion) in the second quarter of 2004.
The company said it expected shipments and average selling prices to increase in the third quarter of 2005 and maintained its 2005 capital expenditure budget in the range 3.5 trillion won (about $3.35 billion) to 4.5 trillion won (about $4.31 billion).
Net income in the second quarter of 2005 swung to a profit of 41 billion won (about $40 million) from a loss of 79 billion won (about $76 million) in the first quarter of 2005, and compared to a net profit of 701 billion won (about $678 million) in the second quarter of 2004. Increases in shipments offset the effect of decreases in panel prices. TFT-LCD panels for desktop monitors, notebook computers, TVs and "other applications" accounted for 53, 18, 24 and 5 percent, respectively, on a revenue basis in the second quarter of 2005, compared to 56, 18, 22 and 4 percent, respectively, on a revenue basis in the first quarter of 2005.
Overall, LG.Philips LCD shipped a total of 1,096,000 square meters of net display area in the second quarter of 2005, a 14% sequential quarterly increase, with an average selling price per square meter of net display area of $2,062. This represents a decline in the average selling price per square meter of net display area of approximately 1.1 percent compared to the average of the first quarter of 2005 and an increase of 1.6 percent at the end of the second quarter as compared to the end of the first quarter of 2005.
"In the second quarter we experienced increased demand for monitor and LCD TV panels," said Ron Wirahadiraksa, president and chief financial officer of LG.Philips LCD, in a statement. "In anticipation of this demand, we continued the successful ramp-up of our P6 facility. TV panel shipments have benefited from LCD TV sets approaching more attractive 'sweet spot' prices. We have already taken a leading position in this segment and we expect to further strengthen our market position in the second half of 2005 as demand grows. As our 'P6' facility approaches its design capacity in Q3, we also expect further progress on our cost down efforts, especially for large and wide panels."
As of June 30, 2005, LG.Philips LCD had KRW 1,331 billion (USD 1,287 million) of cash and cash equivalents. Total debt was KRW 3,589 billion (USD 3,469 million), with a net-debt-to-equity ratio of 40% as of June 30, 2005.
"We expect the business environment to continue strengthening in the second half of 2005," said Wirahadiraksa, in the same statement. "For the third quarter of 2005, we believe our area shipments will increase by a mid teen percentage quarter-on-quarter due to continued growth in the monitor and TV segments. We expect a single digit percentage increase in our average sales price per square meter of net display area shipped at the end of the third quarter of 2005 as compared to the end of the second quarter of 2005."
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