Monday, Sep 07, 2009
LG Cable is expected to record robust performance in the first year of 2000 thanks largely to the jump in profit in the optical communication business.
“Sales and ordinary profit up to end of June, 2000 is projected as 980 billion won and 90 billion won, respectively,” explained Senior Vice President Chan-joo Park who is responsible for the Public Relations at LG Cable
This means that while sales grew by 5.2％, operating income rose by 38.5％ over the same period of last year. Analyses show that optical communication played an important part in giving LG Cable such robust results. Ordinary profit for the first half was 90 billion won and is expected to grow to 200 billion won by the end of the year.
The biggest contributor to the improvement in profit is the upturn of the fiber optic cable’s market price this year. Demand for optical cable is also recording explosive growth in and out of Korea.
Citing the worldwide shortage of optical cable, “Currently, supply is playing catch up to demand,” explained a representative at LG Cable. “Currently, new orders from the U.S. or Europe cannot be readily put into production due to shortage of capacity. Judging from the current production capacity, you can say that we have enough orders to fill the production line until the first half of next year.”
Another company representative predicted that electric component business will emerge as one of more important revenue source in the latter half of 2000. Then LG Cable has successfully completed development of various cutting-edge electronic components and is now ready to put them on the market from late this year. LG Cable plans to continue its focus on this potentially lucrative business area. It will invest total 100 billion won until 2002 to increase sales of components from 5.8％ of total sales of last year to 17％ of total sales or 450 billion won by 2002. (Total sales target for 2002: 2.6 trillion won).
“I think LG Cable will not only achieve its goals, but also see its stock value rise if the profit of electronic components, the secondary revenue source, becomes visible within this year and if the restructuring of non-core businesses are completed successfully,” predicted Researcher Chang-mok Lee at Sejong Securities Research Center.
