SEOUL, April 29 (AJP) - LG Electronics is weathering a global spending slowdown by rapidly expanding subscription-based rentals for premium home appliances and scaling its vehicle solutions business, as demand grows for smarter mobility and recurring revenue models, its quarterly breakdown showed Wednesday.
The first-quarter results underscored a structural shift in earnings quality, with high-margin recurring income from appliance subscriptions and a solid order backlog in the vehicle component solutions (VS) unit helping buffer the company against macro headwinds and rising raw material costs.
Headline figures were unchanged from earlier guidance, with record quarterly revenue of 23.73 trillion won and operating profit of 1.67 trillion won.
Beneath the surface, however, the VS division emerged as a key driver, with operating margin climbing above 6 percent — reinforcing its role as a core profit pillar alongside the home appliance business. The shift, analysts say, reduces LG’s traditional exposure to cyclical swings in consumer electronics.
Business-to-business operations are gaining weight, now accounting for 36 percent of total revenue. B2B sales rose 19 percent on-quarter to 6.5 trillion won, supported by expansion into industrial cooling systems for AI data centers and electric vehicle components.
The Home Appliance & Air Solution (HS) unit also showed resilience, maintaining an 8.2 percent operating margin despite U.S. tariff pressure and a weaker Korean won.
Growth was driven by subscription-based sales, which rose 15 percent on-year and 8 percent on-quarter, as LG accelerates the model across emerging markets to secure steadier cash flow.
Looking ahead, the company is positioning for the AI infrastructure cycle by expanding its Eco Solution (ES) portfolio, particularly advanced liquid cooling systems for global data centers.
“The first-quarter results have effectively confirmed a recovery in profitability across core businesses,” said Jeong Min-gyu, an analyst at Sangsangin Investment & Securities. “Expectations are rising as commercialization of robot actuators and chiller orders for AI data centers gains visibility.”
Copyright ⓒ Aju Press All rights reserved.