SEOUL, January 30 (AJP) - LG Electronics reported a sharp decline in operating profit in 2025, as hefty one-off restructuring costs and persistent weakness in its media and entertainment business weighed heavily on earnings, overshadowing steady growth in its core home appliance and vehicle component units.
The South Korean electronics maker said its annual operating profit fell 27.5 percent from a year earlier to 2.48 trillion won ($1.8 billion), after slipping into an operating loss in the fourth quarter amid rising cost burdens.
LG posted an operating loss of 109 billion won in the October–December period, marking its first quarterly loss in nine years, as delayed demand recovery for display-based products, intensifying competition in the global TV market and increased marketing expenses eroded profitability.
Earnings were further pressured by several trillion won in non-recurring costs related to a company-wide voluntary retirement program implemented in the second half of the year, the company said.
While revenue growth continued, profitability deteriorated as cost pressures outpaced sales expansion.
The company’s media and entertainment division swung to an operating loss of 751 billion won for the year, reversing a profit recorded a year earlier, as sluggish global TV demand and price competition from Chinese rivals weighed on margins.
By contrast, LG’s core businesses delivered relatively resilient performance.
The home appliance division posted operating profit of 1.28 trillion won, supported by production optimization, price adjustments and cost controls aimed at mitigating tariff-related risks.
The vehicle solutions unit also delivered its strongest performance on record, with operating profit rising to 559 billion won, driven by smoother conversion of order backlogs into sales.
Business-to-business revenue, including vehicle components, heating, ventilation and air conditioning, and component solutions, rose 3 percent year on year to 24.1 trillion won, reflecting the company’s ongoing shift toward so-called “quality growth” areas.
Subscription-based appliance services and direct-to-consumer sales channels continued to expand, with subscription revenue jumping 29 percent to nearly 2.5 trillion won.
LG said the restructuring measures are expected to help ease fixed-cost burdens over the medium to long term, while efforts are under way to strengthen competitiveness in its media business.
Looking ahead, the company said it plans to reinforce its OLED and LCD product lineup and expand its webOS-based advertising and content ecosystem.
LG also highlighted growing opportunities in cooling solutions for artificial intelligence data centers, including plans to commercialize liquid-cooling technologies and deepen related partnerships.
Shares of LG Electronics closed down 1.8 percent at 99,100 won on Friday.
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