■Company posts KRW 536.8 billion sales, 42.2 billion in operating profit, and KRW 38.6 billion in net profit
■ Amid domestic and overseas economic recession and falling exchange rates, company retains last-year levels of sales and operating profit
■ Transmission and distribution category growssharply at home and overseas; photovoltaic and China businesses also add to results
■ Results are attributed to consistent fostering of systems business and partial resolution of Iraq risks
Amid the domestic low-growth, low-price sentiment, and the global economic recession, LSIS has successfully driven ahead with its strategy for enhancing its power systems business, reaping good results.
LSIS announced its Q3 results, based on consolidated financial statements, on October 29,disclosing that it had posted KRW 536.8 billion in sales, KRW 42.2bn in operating profit, and KRW 38.6 billion in net profit.
Compared with the same period last year, the company’s sales increased by 0.85%while operating profit and net profit fell 0.06% and 16.71%, respectively.
These results are attributable to the power categoryand, more particularly, to the stable sales posted by the domestic and overseas transmission and distribution businesses and the increase in the operating profit of thephotovoltaic business in the second half.
LSIS has driven ahead with power devices as a “cash cow,” and focused on boosting its capacity to conduct system business that combine devices in a bid to secure total solution competitiveness.
The company has not only pushed ahead with single-device businesses, but also secured systems-based EPC capacity, thus increasing its share of the business pie. Also, to maximize its survival competitiveness in the global power infrastructure markets amid widespread economic recession, it has been fostering the system business category for severalyears now.
Thus, despite the sluggish growth of the industry and an overall setback due to declining Q3 SOC, LSIS aggressively promoted its marketing activities, thereby posting a significant result in sales and operating profit in its domestic and overseas transmission and distribution businesses.
With regard to the photovoltaic business, both domestic and Japanese sales have been on the increase, while China’s Wuxi subsidiary has led the improvement of sales in circuit breakers, switches and other devices, adding to the overall increase in sales.
The 16% fall in net profit is attributable to the continuous fall in exchange rates since Q2 2008, and to the sudden rise of the falling Q3 exchange rate, thus creating an exchange hedge loss, while the same period last year saw an exchange hedge evaluation profit. However, this is irrelevant to actual profitability, and is only a temporary trend.
In the case of Q4, which accounts for the largest portion of annual sales, the power business is expected to continue growing, and the transport SOC business results, including the Honam express train and Bangladesh’s railroad signal control business, will be incorporated into the April results, offsetting the somewhat sluggish results of Q1 and Q2.
An LSIS official said, “Despite the ongoing crisis, our strategy succeeded in bolstering the systems business in addition to the existing strong power devices business. The increased sales of the overseas systems business have helped us to partially resolve the Iraq risk due to civil war.”
He continued, “Big transport SOC projects, which were expected to be reflected in the Q3 results, will be carried over to the Q4 results, offering a positive outlook of stable growth in Q4. As our marketing is focused on high-value solutions, we expect positive results.”
LSIS Cites Consistent Power System Enhancement System as Reason for Handsome Q3 Results
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