LG Electrics CEO talks up mobile sales.
SEOUL -- LG Electronics Inc, the world's fourth-largest mobile phone maker, expects the weaker won currency to mainly benefit its handset business this year, its chief executive told Reuters on Friday.
The currency impact will be limited for its television business, though, because LG produces a large portion of them in China, Nam Yong said when asked about the outlook for LG's main business units.
The South Korean won's value has fallen nearly 11 per cent against the US dollar so far this year, compared with a less than 1 per cent loss for all of 2007. A softer won helps local exporters such as LG price their goods more competitively in foreign markets.
"The won will help handsets and TVs," Mr Nam said. "But the impact will be smaller for TVs, as we produce many (of them) in China."
LG Electronics shares fell 3.48 per cent to 152,500 won by 1203 AEST, leading the wider market's 1.24 per cent fall, as a recent rally in the stock prompted investors to book profits. As of Thursday's close, shares in LG had soared 58 per cent so far this year, thanks to its bright earnings outlook.
High-end mobile phones and gains from its LCD screen venture helped LG report outstanding first-quarter earnings. LG posted a record overall operating profit of 564 billion won ($576 million) in the January-March quarter and said it was likely to surpass this year's mobile phone sale target of 100 million units.
It overtook Sony Ericsson as the world's fourth-largest handset manufacturer in the first quarter, but still trails Nokia, Samsung Electronics Co Ltd and Motorola.
In the TV business, LG aims to sell 17 million flat-screen TVs this year. The company competes with Samsung, Sony Corp and Philips in the booming flat-screen TV market, which sees strong demand from consumers trading bulky tubes with larger, sleeker sets.
But LG's appliance business, which battles with Whirlpool Corp in a push into the premium North American market, is likely to see the won's impact offset by higher raw materials prices, Mr Nam said.
"For appliances, raw materials prices in South Korea are high."
The softer won, coupled with the global price rally in the commodities market, have boosted prices of imported raw materials such as copper. The weakening US economy has also weighed on the appliance sales.
LG, also the world's biggest household air conditioner producer, is expected to more than double its parent-basis net profit this year to 2.48 trillion won ($2.53 billion), according to Reuters Estimates.
source
The currency impact will be limited for its television business, though, because LG produces a large portion of them in China, Nam Yong said when asked about the outlook for LG's main business units.
The South Korean won's value has fallen nearly 11 per cent against the US dollar so far this year, compared with a less than 1 per cent loss for all of 2007. A softer won helps local exporters such as LG price their goods more competitively in foreign markets.
"The won will help handsets and TVs," Mr Nam said. "But the impact will be smaller for TVs, as we produce many (of them) in China."
LG Electronics shares fell 3.48 per cent to 152,500 won by 1203 AEST, leading the wider market's 1.24 per cent fall, as a recent rally in the stock prompted investors to book profits. As of Thursday's close, shares in LG had soared 58 per cent so far this year, thanks to its bright earnings outlook.
High-end mobile phones and gains from its LCD screen venture helped LG report outstanding first-quarter earnings. LG posted a record overall operating profit of 564 billion won ($576 million) in the January-March quarter and said it was likely to surpass this year's mobile phone sale target of 100 million units.
It overtook Sony Ericsson as the world's fourth-largest handset manufacturer in the first quarter, but still trails Nokia, Samsung Electronics Co Ltd and Motorola.
In the TV business, LG aims to sell 17 million flat-screen TVs this year. The company competes with Samsung, Sony Corp and Philips in the booming flat-screen TV market, which sees strong demand from consumers trading bulky tubes with larger, sleeker sets.
But LG's appliance business, which battles with Whirlpool Corp in a push into the premium North American market, is likely to see the won's impact offset by higher raw materials prices, Mr Nam said.
"For appliances, raw materials prices in South Korea are high."
The softer won, coupled with the global price rally in the commodities market, have boosted prices of imported raw materials such as copper. The weakening US economy has also weighed on the appliance sales.
LG, also the world's biggest household air conditioner producer, is expected to more than double its parent-basis net profit this year to 2.48 trillion won ($2.53 billion), according to Reuters Estimates.
source
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