EXCLUSIVE: LG Electronics, who last year only managed a $13K profit from almost a billion dollars turnover in Australia, is set to announce a major restructure of their business, with the introduction of new divisions and an expansion in the product range that they sell.
According to senior executives, LG Australia are expanding their business display operation while aligning their various divisions with global operations. They are also set to announce new divisions, with insiders tipping a return to the PC and portable devices market as well as the Pro AV market.
Last month LG appointed William Cho, the former President and CEO of LG Canada, to take over the company’s operations in Australia, following an exposure by Choice that LG had been using an illegal device in two of its refrigerators in order to make them look energy efficient. The Australian company is now facing a multi-million dollar fine following an investigation by the Australian Competition and Consumer Commission.
This financial penalty could drastically impact the Australian operations of LG, who last year only managed profits of $13,553, on revenues of $968 million.
In the 2007/2008 financial year, LG Australia had profits of $17,228 on revenues of $1.12 billion.
Graeme Cunningham, Director of Sales at LG Electronics, said, “We are currently restructuring our business in several areas. We are currently recruiting people and we are realigning several divisions in line with our global operations. We are expanding our commercial business division as we see growth in this market. We are currently looking to improve our account management structure and our State operations” he said.
LG, who will be the second major vendor to launch 3D TVs in Australia with a major role out of several new TV models in early May, is also set to be the sole 3D TV sponsor of the of the Nine Network’s coverage of the NRL State of Origin series, which will be first ever broadcast of a major sporting event in Australia in 3D. The major sponsor of the event will be Harvey Norman who are set to ask vendors to fund their sponsorship.
Among the LG TV offering in Australia will be new plasma, LED and 3D TVs. According to Warren Kim, Product Marketing Manager of TVs, the company will launch several new models in May in an effort to take on arch rival Samsung and a surging Panasonic.
“We have an excellent new TV offering and yes we will be advertising in the State Of Origin 3D coverage” he said.
He added “We believe that the coverage presents LG with an opportunity to showcase our new 3D TV offering”.
Last month in the UK, LG joined forces with LG Electronics to offer live 3D sports broadcasts in pubs across the country. Sky purchased 15,000 3D TVs from the Korean manufacturer, weeks out from the broadcast of the Manchester Arsenal game in the UK Premier League.
Last night, LG Electronics reported a first quarter net profit on lower sales as demand for flat-panel TVs grew while the handset market lagged.
Net profit was $607 million, up from a loss of $180 million from the prior year. Sales were $12.3 billion for the quarter, ended March 31, up 3.7 percent from the prior year’s opening quarter.
By sector, LG’s home entertainment recorded a 20.5 percent gain in sales and an operating profit of $163.9 million, compared with a loss of $900,000 in the first quarter of last year.
LG reported LCD TV shipments were up 62 percent year on year while PDP TV shipments grew 36 percent in large screens. In mobile handsets, sales were down 19.7 percent in the quarter compared with last year, with operating profit at $25.2 million, down from $224 million in the prior year. North American sales declined due to a demand shift to smartphones, LG reported.
In home appliances, sales were up 8 percent, with operating profits at $186.4 million, up from the first quarter of last year, which reached $119.8 million. Much of the sales growth was sparked demand in North America and Asia, with China leading with 8 percent year-on-year growth.
