LG Display Co., Ltd. (NYSE:LPL) Q2 2022 Earnings Conference Call July 27, 2022 1:00 AM ET

Company Participants

Brian Heo – Head-Investor Relations

Sunghyun Kim – Chief Financial Officer

Hee-Yeon Kim – Senior Vice President-Corporate Strategy Group

Daniel Lee – In Charge-Large Display Marketing

Ki Hwan Son – Vice President-Auto Marketing

Jeong Yi – In Charge-Business Intelligence

Seong Gon Kim – In Charge-Medium Display Marketing

Suk Heo – Head-Investor Relations Division and Director

Seung Min Lim – Vice President-Corporate Planning

Conference Call Participants

Won-Suk Chung – Hi Investment Securities

SK Kim – Daiwa Capital Market

Han-Soo Kim – Hana Securities

Junghoon Chang – Samsung Securities

Brian Heo

[Foreign Language] Good afternoon and good morning. This is Brian Heo, in charge of LG Display's IR. On behalf of the company, let me thank all the participants at this conference call. Today, I'm joined by the CFO, Sunghyun Kim; Hee-Yeon Kim, Senior Vice President of Corporate Strategy Group; Seung Min Lim, Vice President of Corporate Planning; Jeong Yi, in charge of Business Intelligence; Daniel Lee, in charge of Large Display Marketing; Seong Gon Kim, in charge of Medium Display Marketing, and Ki Hwan Son, Vice President of Auto Marketing.

[Foreign Language] The conference call will be conducted in both Korean and English. Please refer to the provisional earnings release today or the IR Events section in the company's website for more details on the financial results of Q2 2022. [Foreign Language] Before we begin the presentation, please take a moment to read the disclaimer. [Foreign Language] Please note that today's results are based on consolidated IFRS standards prepared for your benefit and have not yet been audited by an outside auditor.

[Foreign Language] Let me start off with our business performance in Q2. Due to COVID-19, there were lockdowns in some of the Chinese production basis, which have also affected the production and shipment of the company's high value and IT products. And as a result, the company's business performance in Q2 has underperformed on the initial guidance. Revenue in Q2 was KRW5.607 trillion, down 13% Q-o-Q and 19% Y-o-Y. There were shipment disruptions from lockdowns in production bases, soft demand in the downstream and continued fall in LCD panel price. There was operating loss of KRW488 billion. Operating margin in Q2 was minus 9% with EBITDA margin at 12%. There was net loss of KRW382 billion.

[Foreign Language] Next is area shipment and ASP trend. Area shipment in Q2 was 7.85 million square meters, decreasing 4% from the previous quarter. Aside from the impact from Chinese lockdowns, concerns of economic downturn led to slowing demand in the downstream. Set makers, to minimize inventory, reduced their purchase, resulting in less shipment of both large and medium display products. ASP per square meter was $566, down 14% Q-o-Q. Shipment of POLED smartphones decreased due to seasonality, and LCD panel price continued to decline.