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LG-Philips LCD losses continue

Falling LCD prices hurt giant manufacturer

Simon Burns in Taipei, vnunet.com 17 Jan 2007

LG-Philips LCD, the world's second largest LCD maker, lost $190m over the last three months of 2006. The Korea-based firm struggled with high manufacturing costs and falling LCD prices throughout 2006.

The company's chief executive and several other senior executives were deposed in a reshuffle in December, after shareholders sought drastic action.

Analysts said that they were encouraged by this move and by an improvement in operating losses from $411m in the third quarter of 2006 to $190m in the fourth quarter, which came despite an 11 per cent increase in sales.

LG-Philips has slashed manufacturing costs by 10 per cent in just three months, executives announced yesterday.

"We are encouraged by our performance this quarter and the results of the enhanced cost reduction initiatives we are implementing," said chief financial officer Ron Wirahadiraksa.

"In addition, we maintained finished goods inventory levels at slightly under three weeks at the end of the quarter.

"Further, the increasing number of long-term supply agreements we have secured reflects our continued focus on closer customer collaboration as we head into a challenging market environment in 2007."

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