What They Say
LG Display published its results for Q4 2021 (LG Display Reports Fourth Quarter 2021 Results) and also held an earnings call to give more detail. The call started with a look at the OLED EX technology which uses Deuterium and new AI algorithms to boost brightness and lifetimes. (Deuterium in OLED).
The record earnings (up 18% YoY) were on the back of the combination of good sales of OLEDs in all sizes and good sales of IT panels. Profit was down from Q3 because of the drop in LCD panel pricing. Operating profit margin in Q4 was 5%, with EBITDA margin at 19%. Net profit was KRW 180 billion ($149 million). For the year, revenue was up 23% with an operating margin of 7%.
Despite the drop in LCD pricing, the area panel price was up 8% from Q3 from the contribution of large and small/medium OLEDs to $806/m². IT panels were 42% of output, with TV at 27% while mobile and others represented 31%, up 8 percentage points because of smartphone and wearable flexible OLED sales.
The large OLED for TV business is now in profit after the growth in the last year and achieved breakeven over the whole of 2021. The plan is to grow those sales by 20% this year.
In the IT LCD business, the firm believes that its high end panels will be able to avoid the worst of the price drops that low end panels will see. However, the IT market is likely to be flat, year on year.
Automotive LTPS LCD and OLED sales continue to grow and the firm will focus on tandem OLED for that application with three options – plastic-based OLEDs, ‘advanced thin OLED’ (ATO) and LTPS with in-cell touch where price is the key point.
As you would expect, the company would not comment on questions about the much rumoured deal for Samsung to buy WOLED panels from LGD.
What We Think
Nothing unexpected in this call, but the firm must be pleased that the large WOLED business is finally in the black. Now it has to continue to juggle the pricing to achieve the growth it wants without killing the margin. (BR)
