Business Context and Reporting Period
This Form 6-K filing by LG.Philips LCD Co., Ltd. (now LG Display Co., Ltd.) was submitted on January 16, 2007. The report discloses a material change in revenues or income exceeding 15% for the fiscal year ended December 31, 2006, compared to the prior year. The financial data presented follows Korean GAAP standards.
Key Financial Metrics (2006 vs. 2005)
Consolidated Financial Data (KRW Billions):
| Metric | 2006 | 2005 | Change |
|---|---|---|---|
| Revenues | 10,624 | 10,076 | +5.4% |
| Operating Income | -879 | 470 | -1,349 |
| Ordinary Income | -1,021 | 369 | -1,390 |
| Net Income | -769 | 517 | -1,286 |
| Total Assets | 13,488 | 13,674 | - |
| Total Liabilities | 6,598 | 5,998 | - |
| Total Shareholders' Equity | 6,890 | 7,676 | - |
Non-Consolidated Financial Data (KRW Billions):
| Metric | 2006 | 2005 | Change |
|---|---|---|---|
| Revenues | 10,201 | 8,890 | +14.7% |
| Operating Income | -945 | 448 | -1,393 |
| Net Income | -769 | 517 | -1,286 |
The filing does not provide specific data on cash flow, debt maturity profiles, or liquidity ratios beyond total liabilities and equity.
Material Changes
- Profitability Collapse: The company swung from profitability to significant losses in 2006. Consolidated operating income dropped from a profit of 470 billion KRW to a loss of 879 billion KRW.
- Revenue Growth vs. Margin Compression: While consolidated revenues increased by 5.4% and non-consolidated revenues rose by 14.7%, the company failed to maintain margins, resulting in a net loss of 769 billion KRW compared to a net profit of 517 billion KRW in 2005.
- Balance Sheet Deterioration: Total shareholders' equity decreased from 7,676 billion KRW to 6,890 billion KRW, reflecting the accumulated losses. Total liabilities increased from 5,998 billion KRW to 6,598 billion KRW.
Guidance, Outlook, and Risks
The filing text does not contain specific management commentary, forward-looking guidance, or detailed risk factors beyond the disclosure of the material financial decline. The primary risk highlighted by the data is the severe deterioration in operating performance and the erosion of shareholder equity.
Investor Verification Checklist
- Verify the specific causes of the operating loss (e.g., panel price declines, high depreciation, or inventory write-downs) in the full annual report.
- Confirm the company's liquidity position and ability to service increased liabilities given the negative cash flow implied by the net loss.
- Review the reconciliation between consolidated and non-consolidated revenue figures to understand the impact of subsidiaries.
- Assess the sustainability of the 5.4% revenue growth in the context of the LCD market cycle during 2006.