Business Context and Reporting Period
Company: LG Display Co., Ltd.
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: First Quarter 2010 (ended March 31, 2010)
Filing Date: April 22, 2010
Business Overview: LG Display is a leading manufacturer of TFT-LCD panels, OLEDs, and flexible displays for TVs, monitors, notebook PCs, and mobile applications. The company operates eight fabrication facilities and five back-end assembly facilities globally with approximately 33,000 employees.
Key Financial Metrics (Q1 2010)
| Item (KRW Billion) | Q1 2010 | Q4 2009 | Q1 2009 |
|---|---|---|---|
| Revenues | 5,876 | 5,905 | 3,542 |
| Operating Income | 789 | 313 | (317) |
| Income Before Tax | 842 | 358 | (488) |
| Net Income | 649 | 502 | (347) |
| EBITDA | 1,421 | 1,091 | 237 |
Liquidity and Balance Sheet:
- Cash and cash equivalents: KRW 3,144 billion (as of March 31, 2010).
- Liability to equity ratio: 97%.
Operational Metrics:
- Total display area shipped: 6.16 million square meters.
- Average utilization rate: Nearly 100%.
- Inventory days: Below two weeks.
- Weighted average selling price: Increased 2.4% QoQ.
- Average selling price per square meter: USD 838.
Material Changes vs. Prior Periods
Quarter-over-Quarter (Q1 2010 vs. Q4 2009):
- Revenues: Decreased slightly by 0.5%.
- Operating Income: Surged 152.1% to KRW 789 billion from KRW 313 billion.
- Net Income: Increased 29.3% to KRW 649 billion.
- EBITDA: Increased 30% to KRW 1,421 billion.
- Cost of Goods Sold (COGS): Decreased 5% per square meter due to completed depreciation for P7 and improved production yields.
Year-over-Year (Q1 2010 vs. Q1 2009):
- Revenues: Increased 65.9%.
- Operating Income: Turned from a loss of KRW 317 billion to a profit of KRW 789 billion.
- Net Income: Turned from a loss of KRW 347 billion to a profit of KRW 649 billion.
- EBITDA: Increased 500%.
Outlook, Management Commentary, and Risks
Management Commentary:
CEO Young Soo Kwon attributed the sound performance to timely production based on accurate market predictions, customer-oriented marketing, and a favorable LCD market. The company plans to expand its portfolio through development in new areas such as AMOLED and flexible displays.
Q2 2010 Guidance:
- Shipment Volume: Expected to increase by a low to mid-teens percentage compared to Q1 2010.
- Pricing: Average selling price per square meter expected to remain similar to Q1 2010 levels.
Risks and Contingencies:
- Financial data for Q1 2010 is unaudited and subject to change.
- Forward-looking statements involve inherent risks and uncertainties; actual results may differ materially due to factors outlined in SEC filings.
- The company reserves the right to update its business outlook at any time.
Key Facts for Investor Verification
- Profitability Turnaround: Verify the sustainability of the shift from significant losses in Q1 2009 to strong profitability in Q1 2010.
- Cost Reduction Drivers: Confirm the impact of completed depreciation for the P7 facility on future COGS trends.
- Inventory Management: Assess the risk associated with maintaining inventory days below two weeks in a volatile market.
- Debt Structure: Review the implications of a 97% liability-to-equity ratio on financial flexibility.
- Revenue Mix: Analyze the 54% revenue concentration in TV panels versus other segments (monitors, notebooks, mobile).