Seoul: LG Electronics Inc. announced a 5.7 percent decrease in its first-quarter operating profit, attributing the downturn to increased logistics costs. The South Korean electronics giant revealed that its operating profit for the quarter ending in March was estimated at 1.25 trillion won (US$856.7 million).

According to Yonhap News Agency, despite the decline in operating profit, LG Electronics achieved a revenue increase of 7.8 percent year-on-year, reaching 22.74 trillion won. This marks the first time the company surpassed the 22 trillion-won threshold in a first quarter. The operating profit fell 6.2 percent short of the average estimate from a Yonhap Infomax survey.

The company identified rising shipping costs as a primary factor in the dip in operating profit. However, LG Electronics noted that its business-to-business sectors, such as electric vehicle components, subscriptions, and heating, ventilation, and air conditioning (HVAC) businesses, contributed significantly to the robust growth in sales.

The home appliances division also demonstrated solid performance during the quarter. LG Electronics emphasized that despite ongoing uncertainties, the company achieved record-high quarterly sales due to “quality growth” in its B2B, subscription, and direct-to-consumer businesses.

Following its exit from the smartphone market in 2021, LG Electronics has focused on diversifying its business portfolio to position itself as a future-oriented company. The company plans to release its final earnings report at a later date.