![\"Inside](\"https:\/\/www.europesays.com\/korea\/wp-content\/uploads\/2026\/06\/news-g.v1.20260616.d562dca773eb4391bfff8aea91176004_P1.jpg\"\/ "\\"LG")
Inside an LG Display plant. Photo courtesy of LG Display<\/p>\nLG Display (034220.KS) is making progress on reducing debt, long cited as a chronic weakness, alongside an earnings recovery this year. Through asset sales and cost controls, the company cut its debt from 27 trillion won at the end of 2023 to 19 trillion won in two years, and it is continuing to actively pay down debt this year. However, concerns have emerged that the company could fall behind in the industry’s competition to secure new technologies, as it has maintained a policy of reducing capital expenditure and research and development (R&D) investment for years to ease debt pressure.<\/p>\n
According to the financial investment industry on Tuesday, LG Display’s debt, which stood at 19 trillion won at the end of last year, is expected to fall to the 17.6 trillion won range by 2028. Over the same period, equity is projected to steadily increase, lowering the debt-to-equity ratio from the current 251% to 162%, according to the analysis. Interest costs are also expected to fall from 600 billion won annually to around 500 billion won.<\/p>\n
With LG Display expected to record operating profit of around 1.2 trillion won this year and return to profitability, the outlook that its financial structure\u2014which had been steadily deteriorating\u2014will recover to a healthy level is gaining strength. LG Display posted operating losses in the 2 trillion won range for two consecutive years starting in 2022 due to sluggish business, and its debt reached 26.9888 trillion won at the end of 2023. With interest rates also rising at the time, annual interest costs surged to 909.6 billion won, far exceeding operating profit.<\/p>\n
Inside an LG Display plant. Photo courtesy of LG Display<\/p>\n
LG Display reduced its debt to the 19 trillion won range through measures such as selling its liquid crystal display (LCD) plant in Guangzhou, China, but interest costs reached 147.4 billion won in the first quarter of this year, still cited as a factor pressuring earnings. While LG Display is expected to post operating profit exceeding 1 trillion won this year, bearing interest costs amounting to half of that leaves limited room to repay debt and build up capital. In fact, despite recording an operating profit of 146.7 billion won in the first quarter, the company posted a net loss of 575.7 billion won due to interest burdens and other factors, and its net profit this year is likely to fall short of half its operating profit, according to assessments.<\/p>\n
As a result, whether LG Display’s balanced investment strategy can evenly drive both its financial position and business competitiveness going forward is seen as a key issue. Securing a lead in new technologies requires expanding capital expenditure (CAPEX) and R&D investment, but prioritizing improvements to its financial structure makes a conservative investment stance unavoidable.<\/p>\n
The company has set this year’s capital expenditure at the mid-to-high 2 trillion won range, far below the 3 trillion to 5 trillion won range of 2021 to 2023. This policy is reportedly expected to continue until 2028, when its financial structure improves. R&D investment also continued to decline to 2.2114 trillion won last year, and considering the first-quarter investment this year (574.4 billion won), it is expected to remain at a similar level.<\/p>\n
Through reduced investment, LG Display expects to double its free cash flow (FCF)\u2014the cash available to repay debt\u2014from 952.1 billion won last year to 1.8176 trillion won this year. At the same time, the industry analyzes that the company can maintain essential investment to respond to small-and-medium-sized organic light-emitting diode (OLED) new product competition, in line with launches by its largest customer Apple of new iPhones and MacBooks, as well as future foldable phones.<\/p>\n
Still, concerns remain. While LG Display can respond to short-term quality competition by upgrading existing infrastructure, large-scale new investment is effectively impossible, which could weaken its mid-to-long-term competitiveness in new technologies. For example, in the small-and-medium-sized panel market, which has become a new battleground for the display industry, competition over 8.6-generation OLED investment is fierce. With expectations that producing larger panels could cut costs by about 20% compared with now (6th generation), Samsung Display has invested 4 trillion won and is set to begin mass production, while China’s BOE is also catching up.<\/p>\n
“LG Display’s position is that it can respond with 6th-generation technology, but price competition with 8.6 generation going forward will not be easy,” an industry official said. “Competitors are securing production capacity through preemptive investment so they can supply immediately when a new market opens.” In response, LG Display said, “We can prepare new OLED technology at the right time and maintain our competitiveness within the industry,” adding, “We will continue to focus on the OLED business.”<\/p>\n","protected":false},"excerpt":{"rendered":"LG Display (034220.KS) is making progress on reducing debt, long cited as a chronic weakness, alongside an earnings…\n","protected":false},"author":2,"featured_media":54474,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[31026,7265,31025,16863,31027,315,2482,314,359,11559],"class_list":["post-54473","post","type-post","status-publish","format-standard","has-post-thumbnail","category-lg","tag-8-6-generation-oled","tag-capital-expenditure","tag-debt-reduction","tag-debt-to-equity-ratio","tag-financial-structure","tag-lg","tag-lg-display","tag-lg-group","tag-oled","tag-samsung-display"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/54473","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=54473"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/54473\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/54474"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=54473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=54473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=54473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}