LG Display's fourth-quarter operating profit dropped 95 percent from a year earlier due to falling panel prices, a strong won and investments in organic light-emitting diode (OLED) manufacturing facilities.
The display maker said it posted an operating profit of 44.5 billion won ($41.6 million) in the October-December period, down 92 percent from the previous quarter and 95 percent from a year earlier. Sales amounted to 7.13 trillion won, up 2 percent on quarter but down 10 percent on year.
The performance in the final quarter was largely due to the downward pressure on panel prices since late last year, the company said. The strong won against major currencies has also weighed on exports.
Last year, the company vowed to spend 15 trillion won in OLED display production by 2020 to make OLED its mainstay product in TVs and mobile devices. Earlier this month, it upped the initial investment amount to 20 trillion won. As part of its OLED investment plan, LG Display will invest about 9 trillion won in large and small-size OLED panels to accelerate its shift to the premium display market.
Annually, the company posted its highest-ever operating profit at 2.46 trillion won for full 2017, up 87.7 percent from the previous year. Sales were up 4.9 percent at 27.8 trillion won.
Panels for TVs accounted for 40% of revenues in the fourth quarter of 2017, mobile devices for 28%, tablets and notebook PCs for 18%, and desktop monitors for 14%.
"Panel area shipments in the first quarter of 2018 are expected to decrease by a high-single digit percentage due to reduced panel demand stemming from low seasonality," said Don Kim, CFO of LG Display. "The downward trend in panel prices is anticipated to continue, but prices are expected to stabilize at the end of the first quarter." He added, "In 2018, we will speed up our shift to an OLED-focused business structure in order to strategically prepare for the future by investing around KRW 9 trillion."