LG Display Co., Ltd. annual report, Q4 FY2023

LG Display Co., Ltd. — FY2023 Form 20-F

Reporting period: Year ended December 31, 2023; filed April 29, 2024. This is an annual report, not a standalone fourth-quarter filing. The supplied filing does not provide clear standalone Q4 financial results. Financial statements are prepared under IFRS as issued by the IASB and presented in Korean won (₩).

Business context and key financial metrics

LG Display manufactures TFT-LCD and OLED panels for IT products, televisions, mobile devices, automotive displays and other applications. It is shifting production toward higher-value OLED panels and reducing TFT-LCD capacity. OLED represented 48% of 2023 revenue, up from 40% in 2022.

MetricFY2023FY2022
Revenue₩21.331 trillion₩26.152 trillion
Gross profit / margin₩0.345 trillion / 1.6%₩1.124 trillion / 4.3%
Operating profit (loss)Not separately presented under IFRSNot separately presented under IFRS
Profit (loss) for the year(₩2.577 trillion)(₩3.196 trillion)
Loss attributable to controlling-company owners(₩2.734 trillion)(₩3.072 trillion)
Net cash from operating activities₩1.683 trillion₩3.011 trillion
Capital expenditure cash outflow₩3.483 trillion₩5.079 trillion
Cash and cash equivalents₩2.258 trillion₩1.825 trillion
Current assets / current liabilities₩9.503 trillion / ₩13.885 trillion₩9.444 trillion / ₩13.962 trillion
Total liabilities / equity₩26.989 trillion / ₩8.771 trillion₩24.367 trillion / ₩11.319 trillion

On a K-IFRS basis disclosed in the filing, operating loss was ₩2.510 trillion in 2023 versus ₩2.085 trillion in 2022. The IFRS financial statements in this 20-F do not present operating profit or loss as a separate line.

Material changes versus the prior year

  • Revenue fell 18.4% on the IFRS financial-statement figures. The company’s MD&A describes a 19.1% decline using 2022 revenue before a ₩213 billion forward-exchange hedge loss was reclassified as a revenue deduction. Investors should distinguish these bases.
  • IT-panel revenue fell 29.9% to ₩7.853 trillion; television-panel revenue fell 37.9% to ₩4.331 trillion. Mobile and other applications revenue rose 11.3% to ₩9.070 trillion and became the largest product category.
  • Gross margin declined to 1.6% from 4.3%, as pricing pressure and weak demand outweighed lower overall costs. Net loss narrowed, but remained substantial.
  • Operating cash flow decreased to ₩1.683 trillion. Capital spending fell 31.4% to ₩3.483 trillion; operating cash flow less property, plant and equipment purchases was approximately negative ₩1.800 trillion.
  • Cash plus bank deposits totaled ₩3.163 trillion at year-end. Working-capital deficit was ₩4.382 trillion; the current ratio was approximately 0.68.
  • Borrowings and bonds totaled approximately ₩16.529 trillion, before lease liabilities; cash and current bank deposits imply net borrowings of roughly ₩13.366 trillion. The liabilities-to-equity ratio rose to 308% from 215%.
  • Depreciation and amortization was ₩4.214 trillion. Finance costs increased, including interest expense of ₩723 billion versus ₩415 billion in 2022.

Outlook, risks and unusual items

  • Outlook: Management expects 2024 cash capital expenditures to be lower than in 2023, focused on previously announced OLED facilities and essential recurring investment. This is subject to reassessment; the filing gives no numerical 2024 revenue or profit guidance.
  • Liquidity and financing: Management said available working-capital sources, including debt financing, should be sufficient for at least 12 months from the filing date. The company also completed a March 2024 share issue of 142.2 million shares for gross proceeds of about ₩1.292 trillion, intended for facilities, working capital and debt repayment. This subsequent issuance materially increased shares outstanding and diluted existing holders.
  • Market and execution risks: The company cites industry cyclicality and overcapacity, falling panel prices, weak consumer demand, intense competition—particularly from Chinese manufacturers—customer concentration, OLED cost and ramp-up risks, and execution and funding risks associated with capital-intensive manufacturing.
  • Other risks: Significant exposure to foreign-exchange and interest-rate movements; debt covenants and cross-default provisions; supply-chain constraints; product defects; labor and safety matters; and geopolitical and economic uncertainty. Top ten end-brand customers represented 87% of 2023 sales; LG Electronics and its subsidiaries accounted for 15.8% of sales.
  • Impairment and tax estimates: 2022 included ₩1.331 trillion of impairment losses related to large-sized OLED assets. 2023 impairment losses were lower, but management’s deferred-tax-asset recognition and impairment valuations rely on forecasts of future taxable income, revenue and costs. The auditor identified both impairment assessment and deferred-tax-asset recognition as critical audit matters.
  • Contingencies: A UK follow-on antitrust damages judgment was issued in February 2024, but the amount payable remained subject to further court determination as of April 24, 2024. Other proceedings may also result in costs; the filing says timing and amounts cannot be reliably estimated. The company also reported a 2021 chemical-leak incident; the related case concluded in March 2024, with a ₩20 million company fine paid.
  • Dividends: No cash dividend was declared for 2023; the prior dividend was ₩650 per share for 2021.
  • Governance and controls: The auditor gave unqualified opinions on the IFRS statements and internal control over financial reporting as of December 31, 2023. PwC was appointed as auditor for 2024–2026 under Korea’s auditor-designation rules; KPMG audited FY2023.

Investor verification priorities

  • Confirm whether the comparison uses IFRS revenue of ₩26.152 trillion for 2022 or the MD&A figure of ₩26.365 trillion before the ₩213 billion hedge-loss reclassification.
  • Review the full-year cash-flow statement, debt maturity and covenant disclosures, and the extent to which operating cash flow can support investment and repayments.
  • Verify the March 2024 share-issue proceeds, their use, the post-issue share count and the resulting dilution.
  • Track OLED mix, utilization, pricing, gross margin and the ramp-up and returns from the AP5 facility and other OLED investments.
  • Monitor the UK antitrust damages determination and the recoverability assumptions supporting deferred tax assets and asset carrying values.