We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Name | Symbol | Market | Type |
|---|---|---|---|
| LG Display Co Ltd | NYSE:LPL | NYSE | Depository Receipt |
| Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.06 | 1.89% | 3.24 | 3.22 | 3.16 | 3.16 | 152,043 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2024
LG Display Co., Ltd.
(Translation of Registrant’s name into English)
LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336, Republic of Korea
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ☐ No ☒
QUARTERLY REPORT
(From January 1, 2024 to March 31, 2024)
THIS IS A TRANSLATION OF THE QUARTERLY REPORT ORIGINALLY PREPARED IN KOREAN AND IS IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SUPERVISORY COMMISSION.
IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED AND CERTAIN NUMBERS WERE ROUNDED FOR THE CONVENIENCE OF
READERS. REFERENCES TO “Q1”, “Q2”, “Q3” AND “Q4” OF A FISCAL YEAR ARE REFERENCES TO THE THREE-MONTH PERIODS ENDED MARCH 31, JUNE 30, SEPTEMBER 30 AND DECEMBER 31, RESPECTIVELY, OF SUCH
FISCAL YEAR. REFERENCES TO “W” ARE REFERENCES TO THE KOREAN WON.
UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A CONSOLIDATED BASIS IN ACCORDANCE WITH KOREAN INTERNATIONAL FINANCIAL REPORTING STANDARDS, OR K-IFRS, WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. K-IFRS ALSO DIFFERS IN CERTAIN RESPECTS FROM THE INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ISSUED BY THE INTERNATIONAL ACCOUNTING STANDARDS BOARD. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES IN THIS DOCUMENT.
| 1. |
3 | |||||||||
| A. |
3 | |||||||||
| B. |
3 | |||||||||
| C. |
3 | |||||||||
| D. |
3 | |||||||||
| E. |
4 | |||||||||
| F. |
4 | |||||||||
| 2. |
4 | |||||||||
| A. |
4 | |||||||||
| B. |
5 | |||||||||
| C. |
8 | |||||||||
| D. |
8 | |||||||||
| 3. |
8 | |||||||||
| A. |
8 | |||||||||
| B. |
8 | |||||||||
| C. |
9 | |||||||||
| 4. |
10 | |||||||||
| A. |
10 | |||||||||
| B. |
10 | |||||||||
| C. |
10 | |||||||||
| 5. |
11 | |||||||||
| A. |
11 | |||||||||
| B. |
11 | |||||||||
| C. |
12 | |||||||||
| D. |
12 | |||||||||
| E. |
12 | |||||||||
| 6. |
12 | |||||||||
1
| 7. |
12 | |||||||||
| A. |
12 | |||||||||
| B. |
13 | |||||||||
| 8. |
14 | |||||||||
| 9. |
14 | |||||||||
| A. |
14 | |||||||||
| B. |
15 | |||||||||
| 10. |
16 | |||||||||
| 11. |
16 | |||||||||
| A. |
16 | |||||||||
| B. |
17 | |||||||||
| C. |
19 | |||||||||
| D. |
19 | |||||||||
| E. |
19 | |||||||||
| 12. |
19 | |||||||||
| A. |
19 | |||||||||
| B. |
20 | |||||||||
| C. |
21 | |||||||||
| D. |
21 | |||||||||
| 13. |
23 | |||||||||
| A. |
23 | |||||||||
| B. |
23 | |||||||||
| 14. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
23 | ||||||||
| 15. |
23 | |||||||||
| 16. |
23 | |||||||||
| A. |
23 | |||||||||
| B. |
23 | |||||||||
| 17. |
24 | |||||||||
| A. |
24 | |||||||||
| B. |
24 | |||||||||
| 18. |
24 | |||||||||
| A. |
24 | |||||||||
| B. |
25 | |||||||||
| C. |
25 | |||||||||
Attachment: 1. Financial Statements in accordance with K-IFRS
2
| 1. | Company |
| A. | Name and contact information |
The name of our company is “EL-GI DISPLAY CHUSIK HOESA,” which shall be “LG Display Co., Ltd.” in English.
Our principal executive office is located at LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336, Republic of Korea, and our telephone number is +82-2-3777-1010. Our website address is http://www.lgdisplay.com.
| B. | Credit rating |
This information is omitted in quarterly reports in accordance with Korean disclosure rules, and we plan to include such information in our semi-annual and annual reports.
| C. | Capitalization |
| (1) | Change in capital stock (as of March 31, 2024) |
(Unit: Won, Shares)
| Date of Issuance |
Method of Issuance |
Details of the Shares Issued | ||||||||||
| Type |
Number of |
Par value |
Offering price |
Remarks | ||||||||
| March 15, 2024 |
Paid-in capital increase (share rights offering to existing shareholders) | Common shares | 142,184,300 | Ratio of paid-in capital increase: 39.74% | ||||||||
| (2) | Convertible bonds (as of March 31, 2024) |
We have no outstanding convertible bonds as of March 31, 2024.
| D. | Voting rights (as of March 31, 2024) |
(Unit: share)
| Description |
Number of shares | |||||
| A. Total number of shares issued(1): |
Common shares(1) | 500,000,000 | ||||
| Preferred shares | — | |||||
| B. Shares without voting rights: |
Common shares | — | ||||
| Preferred shares | — | |||||
| C. Shares subject to restrictions on voting rights pursuant to our articles of incorporation: |
Common shares | — | ||||
| Preferred shares | — | |||||
| D. Shares subject to restrictions on voting rights pursuant to regulations: |
Common shares | — | ||||
| Preferred shares | — | |||||
| E. Shares with restored voting rights: |
Common shares | — | ||||
| Preferred shares | — | |||||
| Total number of issued shares with voting rights (=A – B – C – D + E): |
Common shares | 500,000,000 | ||||
| Preferred shares | — | |||||
| (1) | Authorized: 500,000,000 shares |
3
| E. | Dividends |
| Dividends | for the three most recent fiscal years |
| Description (unit) |
2024 Q1 | 2023 | 2022 | |||||||||||
| Par value (Won) |
5,000 | 5,000 | 5,000 | |||||||||||
| Profit (loss) for the year (million Won)(1) |
(783,157 | ) | (2,733,742 | ) | (3,071,565 | ) | ||||||||
| Earnings (loss) per share (Won)(2) |
(2,037 | ) | (7,640 | ) | (8,584 | ) | ||||||||
| Total cash dividend amount for the period (million Won) |
— | — | — | |||||||||||
| Total stock dividend amount for the period (million Won) |
— | — | — | |||||||||||
| Cash dividend payout ratio (%)(3) |
— | — | — | |||||||||||
| Cash dividend yield (%)(4) |
Common shares |
— | — | — | ||||||||||
| Preferred shares |
— | — | — | |||||||||||
| Stock dividend yield (%) |
Common shares |
— | — | — | ||||||||||
| Preferred shares |
— | — | — | |||||||||||
| Cash dividend per share (Won) |
Common shares |
— | — | — | ||||||||||
| Preferred shares |
— | — | — | |||||||||||
| Stock dividend per share (share) |
Common shares |
— | — | — | ||||||||||
| Preferred shares | — | — | — | |||||||||||
| (1) | Based on profit for the year attributable to the owners of the controlling company. |
| (2) | Earnings per share is based on par value of |
| (3) | Cash dividend payout ratio is the percentage that is derived by dividing total cash dividend by profit for the year attributable to the owners of the controlling company. |
| (4) | Cash dividend yield is the percentage that is derived by dividing cash dividend by the arithmetic average of the daily closing prices of our common shares during the one-week period ending two trading days prior to the closing of the register of shareholders for the purpose of determining the shareholders entitled to receive annual dividends. |
Historical dividend information
| Number of consecutive years of dividends(1) |
Average Dividend Yield(1) | |||||||||
| Interim dividends |
Annual dividends | Last 3 years | Last 5 years | |||||||
| — |
— | 0.94 | 0.56 | |||||||
| (1) | The average dividend yield is calculated using the simple arithmetic average method, including the fiscal years in which no dividend was paid (dividends were paid with respect to fiscal year 2021 only based on the dividend resolution date). |
| F. | Matters relating to Articles of Incorporation |
This information is omitted in quarterly reports in accordance with Korean disclosure rules, and we plan to include such information in our semi-annual and annual reports.
| 2. | Business |
| A. | Business overview |
We were incorporated in February 1985 under the laws of the Republic of Korea. LG Electronics and LG Semicon transferred their respective LCD business to us in 1998, and since then, our business has been focused on the research, development, manufacture and sale of products that apply display technologies such as OLED and TFT-LCD. Sorting by major sales product category, television, IT products, “auto” products (comprising automotive display products), and mobile and other products accounted for 21%, 41%, 10% and 28% of our total sales, respectively, in the first quarter of 2024. Our customers primarily consist of global set makers, and our top ten customers comprised 88% of our total sales revenue in the first quarter of 2024. As a company focused on exports, our overseas sales accounted for approximately 95% of our total sales in the first quarter of 2024. We provide close local support through our overseas sales subsidiaries located in the United States, Germany, Japan, Taiwan, China and Singapore.
We operate key production facilities in Korea, China and Vietnam, and as of March 31, 2024, our cumulative production capacity in 2024 year-to-date was approximately 1.5 million glass sheets, as converted into eighth-generation sheets (2200x2500mm). In order to expand our production capacity of
differentiated and competitive products such as OLED panels, our total capital expenditures on a cash out basis was around W3.5 trillion in 2023. In 2024, we expect to reduce our capital expenditure compared to 2023 to approximately
in the W2 trillion range.
4
The major raw materials for display panel production include glass, semiconductors, polarizers, organic matter, backlight units (“BLU”) and printed circuit boards (“PCB”), and the prices of our raw materials may fluctuate as a result of supply and demand in the market as well as changes in our purchase quantity.
The display industry to which we belong is highly affected by the global economic conditions. Given the characteristics of the display business, which requires large-scale investments, display panel prices may fluctuate due to an imbalance between supply and demand, which may affect our profitability. The sales performance of industry players is differentiated by not only the production capacity of each company but also other competitive differences arising from factors including technology, cost structure, product development capability, manufacturing efficiency, quality control and customer relationships, along with the price differentiation incorporating such factors. In addition, given the high proportion of our sales overseas, our sales of display panels are denominated mainly in U.S. dollars whereas our purchases of raw materials are denominated mainly in U.S. dollars, Japanese Yen and Chinese Yuan. Accordingly, our profit margins may be affected by changes in the exchange rates between the currencies. We strive to minimize the risk relating to foreign currency denominated assets, liabilities and operating cash flow due to exchange rate fluctuations.
Our research and development expenses represent approximately 12% of our sales, and we are continually creating customer value through systematic R&D activities for new products and technologies. Leveraging our competitive R&D activities, we are leading the display market by providing differentiated values in display panel products utilizing our OLED and TFT-LCD technologies for various uses including television, IT and mobile products, as well as automobiles and industrial uses.
Consolidated operating results highlights
(Unit: In billions of Won)
| 2024 Q1 | 2023 | 2022 | ||||||||||
| Sales Revenue |
5,253 | 21,331 | 26,152 | |||||||||
| Gross Profit |
218 | 345 | 1,124 | |||||||||
| Operating Profit (loss) |
(469 | ) | (2,510 | ) | (2,085 | ) | ||||||
| Total Assets |
36,113 | 35,759 | 35,686 | |||||||||
| Total Liabilities |
26,572 | 26,989 | 24,367 | |||||||||
| B. | Industry |
| (1) | Industry characteristics |
| • | From the supply perspective, the display panel industry is technology- and capital-intensive in nature and requires mass production through achieving an economy of scale. |
| • | From the demand perspective, the display panel industry tends to demonstrate a high level of volatility depending on the global macroeconomic conditions, major regional sales events and/or seasonal factors. |
| • | Though the display panel industry is facing a short-term risk of decreased consumption of related goods and reduced confidence of investors due to continued uncertainty in the global macroeconomic environment, there are continued opportunities in the display market to meet changes in consumer lifestyle and specific consumer needs in the mid- to long-term. |
| • | In the market for television display panels, new opportunities from the expansion of the ultra-large TV market are expected to arise with the increase of viewable content (including over-the-top services) and more diversified uses of television (such as playing video games). |
5
| • | In the market for traditional IT products such as laptops and desktop monitors, growth opportunities for new offerings such as gaming products and portable products are expected to increase due to the continually expanding demand for digital content production and consumption that utilize IT products in light of changes in lifestyle. |
| • | In the market for auto products, display panels are increasingly being used in light of the expanded adoption of in-vehicle infortainment systems, and the market is continuing to demonstrate qualitative growth as the demand for larger and higher-resolution display panels continue to increase. |
| • | The growth in the market for smartphone products continued to be concentrated around high value-added products using plastic OLED display panels that offer superior performance through design flexibility, low-power consumption and high resolution, in light of increased use of smartphones for mobile contents and gaming purposes. |
| (2) | Growth Potential |
| • | The display panel industry is expected to continue to grow, as the essential role of display products as a key device and a necessity for information and communication in daily lives of individuals as well as for industrial purposes becomes more pronounced. We are strengthening our business base with a focus on customer value and developing new markets under our strategic plan to transition our business to center around OLED, which has a strong future growth potential within the display panel industry. With respect to large-sized display panels, we are focusing on securing OLED dominance in the market through differentiated products applying META technology with high-resolution and high-luminance while leading the expansion into new business areas, such as transparent OLED display panels and gaming display panels. In the small-sized display panel business, we are securing high value-added and differentiated technology and stable operating capabilities for 6th generation plastic OLED smartphone displays while continuing to grow our automotive display panels business by providing differentiated solutions such as plastic OLED, advanced thin OLED and LTPS LCD panels for ultra-large vehicle displays optimized for software-defined vehicles. We are also preparing to respond to new market opportunities, including automotive sound solutions, augmented reality and virtual reality. Furthermore, in the medium-sized display panel business, we are increasing the proportion of premium products such as high resolution and wide screen products based on IPS and Oxide technologies. |
| (3) | Cyclicality |
| • | The display panel business is characterized by being highly cyclical and sensitive to fluctuations in the general economy. The industry experiences recurring volatility caused by imbalances between supply and demand due to capacity expansion and changing production utilization rates within the industry. |
| • | Macroeconomic factors and other causes of business cycles can affect the rate of growth in demand for display panels. Accordingly, if supply exceeds demand, average selling prices of display panels may decrease. Conversely, if growth in demand outpaces growth in supply, average selling prices may increase. |
| (4) | Market conditions |
| • | Most display panel manufacturers are located in Asia as set forth below. Competition in the TFT-LCD sector is intensifying amid investments in new fabrication facilities led by Chinese panel manufacturers. In response, Korean panel manufacturers are continuing their efforts to maintain their market leadership and differentiate themselves by transitioning their business focus to OLED products and upgrading their TFT-LCD businesses. |
6
| a. | Korea: LG Display, Samsung Display, etc. |
| b. | Taiwan: AU Optronics, Innolux, HannStar, etc. |
| c. | Japan: Japan Display, Sharp, etc. |
| d. | China: BOE, CSOT, HKC, etc. |
| • | Our worldwide market share of large-sized display panels (i.e., panels that are 9 inches or larger) based on revenue is as follows: |
| 2024 Q1 | 2023 | 2022 | ||||
| Panels for Televisions(1)(2) |
12.4% | 12.5% | 23.6% | |||
| Panels for IT Products(1) |
20.1% | 18.6% | 18.8% | |||
| Total(1) |
15.3% | 14.6% | 20.2% |
| (1) | Source: Large Area Display Market Tracker (OMDIA). Data for 2024 Q1 are based on OMDIA’s estimates, as actual results for 2024 Q1 have not yet been made available. |
| (2) | Includes panels for public displays. |
| (5) | Competitiveness and competitive advantages |
| • | Our ability to compete successfully depends on factors both within and outside our control, including the development of new and premium products through technological advances, timely investments based on visibility of profitability, adaptable product portfolio and flexible fabrication mix, achievement of competitive production costs through enhancing productivity and managing supply costs of components and raw materials, our relationship with customers, success in marketing to our end-brand customers, general economic and industry conditions and foreign exchange rates. |
| • | In order for us to compete effectively, it is critical to offer differentiated products that enable us to secure profit margins even during times of a mismatch in the market supply and demand, to be price- and cost-competitive and to maintain stable relationships with customers. |
| • | A substantial portion of our sales is attributable to a limited number of end-brand customers and their designated system integrators. As such, it is important to build a sustained relationship with such customers. |
| • | Developing new products and technologies that can be differentiated from those of our competitors is critical to the success of our business. It is important that we take active measures to protect our intellectual property internationally. It is also necessary to recruit and retain experienced key managerial personnel and skilled line operators. |
| • | As a leading technology innovator in the display industry, we continue to focus on delivering differentiated value to our customers by developing various technologies and products, including display panels with WOLED/POLED, IPS, Oxide, in-TOUCH and other technologies. With respect to OLED panels, following our supply of the world’s first 55-inch OLED panels for televisions in January 2013, we have continued to achieve ongoing technological innovation by continuing to enhance the performance of our WOLED products and to offer differentiated large-sized OLED products such as our large-sized gaming OLED products and those incorporating our META technology. Moreover, we have continually introduced high value-added plastic OLED products for smartphones, automotive products, wearable devices and foldable notebook computers, among others. With respect to TFT-LCD panels, we are leading the market with our competitive advantages in technology, including through our IPS, Oxide and LTPS technology-based ultra-large and ultra-high definition (“Ultra HD” or “UHD”) television panels, desktop and notebook monitors featuring high resolutions, differentiated designs and high frequency refresh rates, and specialized products for automotive, commercial and medical uses. Our production facilities are also equipped to produce products incorporating in-TOUCH technology. |
| • | Moreover, we are maintaining and strengthening close long-term partnerships with major global firms to secure customers and expand relationships for technology development. |
7
| C. | New businesses |
For our continued growth, we are actively exploring and preparing for new business opportunities in response to the changing market environment. As such, we are continually reviewing and looking at opportunities in the display and promising new industries.
| D. | Customer-oriented marketing activities |
Through engaging in detailed analysis and acquiring insight on the market and industry conditions, technology, products and end-user consumers, we seek to provide differentiated values that are customer- and consumer-friendly. In addition, we engage in activities that are geared to proactively identify and offer meaningful benefits to customers and consumers. As a result, we are continually developing products that provide differentiated values using our differentiated technologies. At the same time, we strive to create new markets and mutually benefit our business and our customers by obtaining customer trust and satisfaction through our customer- and consumer-oriented marketing activities.
| 3. | Major Products and Raw Materials |
| A. | Major products |
We manufacture TFT-LCD and OLED panels, of which a significant majority is sold overseas.
(Unit: In billions of Won, except percentages)
| 2024 Q1 | ||||||||||||||||||
| Business area |
Sales type | Items (By product) |
Usage |
Major |
Sales Revenue |
Percentages (%) |
||||||||||||
| Display | |
Goods/Products/Services/ Other sales |
|
Televisions | Panels for televisions | LG Display | 1,125 | 21.4 | % | |||||||||
| IT products | Panels for monitors, notebook computers and tablets | LG Display | 2,128 | 40.5 | % | |||||||||||||
| Auto products | Panels for automobiles | LG Display | 513 | 9.8 | % | |||||||||||||
| Mobile, etc. |
Panels for smartphones, etc. | LG Display | 1,487 | 28.3 | % | |||||||||||||
|
|
|
|
|
|||||||||||||||
| Total |
5,253 | 100.0 | % | |||||||||||||||
|
|
|
|
|
|||||||||||||||
| B. | Average selling price trend of major products |
The average selling prices of display panels are subject to change based on market conditions and demand by product category. The average selling price of display panels per square meter of net display area shipped in the first quarter of 2024 decreased by 27% to USD 782 compared to the fourth quarter of 2023. The average selling prices of display panels per square meter of net display area may continually fluctuate in the future due to changes in market conditions and our product mix.
(Unit: US$ / m2)
| Period |
Average Selling Price(1)(2) (in US$ / m2) | |
| 2024 Q1 |
782 | |
| 2023 Q4 |
1,064 | |
| 2023 Q3 |
804 | |
| 2023 Q2 |
803 | |
| 2023 Q1 |
850 | |
| 2022 Q4 |
708 | |
| 2022 Q3 |
675 | |
| 2022 Q2 |
566 | |
| 2022 Q1 |
660 |
| (1) | Quarterly average selling price per square meter of net display area shipped. |
| (2) | Excludes semi-finished products in the cell process. |
8
| C. | Major raw materials |
Prices of major raw materials depend on fluctuations in supply and demand in the market as well as on changes in size and quantity of raw materials due to the increased production of large-sized panels.
(Unit: In billions of Won, except percentages)
| Business area |
Purchase type |
Items |
Usage |
Cost(1) | Ratio (%) |
Suppliers(2) | ||||||||||
| Display | Raw materials | PCB | Display panel manufacturing | 331 | 11.6% | Youngpoong Electronics Co., Ltd., etc. | ||||||||||
| Polarizers | 446 | 15.7% | LG Chem, etc. | |||||||||||||
| BLU | 290 | 10.2% | Heesung Electronics LTD., etc. | |||||||||||||
| Glass | 145 | 5.1% | Paju Electric Glass Co., Ltd., etc. | |||||||||||||
| Drive IC | 132 | 4.7% | LX Semicon, etc. | |||||||||||||
| Others | 1,495 | 52.7% | — | |||||||||||||
|
|
|
|
|
|||||||||||||
| Total | 2,839 | 100.0% | ||||||||||||||
|
|
|
|
|
|||||||||||||
| - | Period: January 1, 2024 ~ March 31, 2024. |
| (1) | Based on total cost for purchase of raw materials which includes manufacturing and development costs, etc. |
| (2) | Among our major suppliers, Paju Electric Glass Co., Ltd. is our affiliate, LG Chem is a member company of the LG Group and LX Semicon is an affiliate of LX Holdings Corp. |
| • | The market prices of main raw materials for display panels fluctuate depending on the global market conditions of raw materials and demand by product segment. |
| • | The market price of polarizers, which is a main raw material for display panels, decreased by 4% as of March 31, 2024 compared to the end of the previous year. |
| • | The market prices of PCB, drive IC and BLU, decreased by 5%, 5% and 3%, respectively, as of March 31, 2024, compared to the end of the previous year. |
| • | Despite the continued global economic slowdown in 2024, our raw material costs have slightly improved compared to the previous year due to an improvement in the balance of market supply and demand in the raw materials market and our efforts to strengthen our raw material cost competitiveness. The prices of raw materials may continue to fluctuate in light of changes in the market conditions of such materials. |
9
| 4. | Production and Equipment |
| A. | Production capacity and output |
| (1) | Production capacity |
The table below sets forth the production capacity of our Gumi, Paju and Guangzhou facilities in the periods indicated.
(Unit: 1,000 glass sheets)
| Business area |
Items |
Location of facilities |
2024 Q1(1) |
2023(1) |
2022(1) | |||||
| Display |
Display panel, etc. | Gumi, Paju, Guangzhou | 1,534 | 5,223 | 8,794 |
| (1) | Calculated based on the maximum monthly input capacity (based on glass input substrate size for eighth-generation glass sheets) during the year multiplied by the number of months in a given period. The production capacity for facilities with adjusted utilization rates have been calculated based on the maximum input capacity during the period. |
| (2) | Production output |
The table below sets forth the production output of our Gumi, Paju and Guangzhou facilities in the periods indicated.
(Unit: 1,000 glass sheets)
| Business area |
Items |
Location of facilities |
2024 Q1(1) |
2023(1) |
2022(1) | |||||
| Display |
Display panel, etc. | Gumi, Paju, Guangzhou | 1,405 | 4,256 | 6,390 |
| (1) | Based on the production results (input standard) of each plant converted into eighth-generation glass sheets. |
| B. | Production performance and utilization ratio |
(Unit: Hours, except percentages)
| Production facilities |
Available working |
Actual working hours in 2024 Q1 |
Average utilization ratio | |||||
| Gumi |
2,184(1) (24 hours x 91 days) |
2,184(1) (24 hours x 91 days) |
100.0 | % | ||||
| Paju |
2,184(1) (24 hours x 91 days) |
2,184(1) (24 hours x 91 days) |
100.0 | % | ||||
| Guangzhou |
2,184(1) (24 hours x 91 days) |
2,184(1) (24 hours x 91 days) |
100.0 | % | ||||
| (1) | Number of days is calculated by averaging the number of working days for each facility. |
| C. | Investment plan |
In 2023, our total capital expenditures on a cash out basis was around W3.5 trillion. In 2024, we expect to reduce our
capital expenditures compared to 2023 to approximately in the W2 trillion range.
10
| 5. | Sales |
| A. | Sales performance |
(Unit: In billions of Won)
| Business area |
Sales types |
Items (Market) |
2024 Q1 | 2023 | 2022(2) | |||||||||||||
| Display |
Products | Display panel | Overseas(1) | 4,984 | 20,634 | 25,651 | ||||||||||||
| Korea(1) | 251 | 620 | 668 | |||||||||||||||
| Total | 5,235 | 21,254 | 26,319 | |||||||||||||||
| Royalty | LCD, OLED technology patent | Overseas(1) | 4 | 16 | 12 | |||||||||||||
| Korea(1) | 0 | 0 | 0 | |||||||||||||||
| Total | 4 | 16 | 12 | |||||||||||||||
| Others |
Raw materials, components, etc. | Overseas(1) | 11 | 46 | 24 | |||||||||||||
| Korea(1) | 4 | 14 | 10 | |||||||||||||||
| Total | 15 | 60 | 34 | |||||||||||||||
| Total |
Overseas(1) | 4,999 | 20,696 | 25,687 | ||||||||||||||
| Korea(1) | 254 | 634 | 678 | |||||||||||||||
|
|
|
|
|
|
|
|||||||||||||
| Total | 5,253 | 21,330 | 26,365 | |||||||||||||||
|
|
|
|
|
|
|
|||||||||||||
| (1) | Based on ship-to-party. |
| (2) | Sales excluding forward exchange hedging loss of |
| B. | Sales organization and sales route |
| • | As of March 31, 2024, each of our television, IT, auto and mobile product businesses had individual sales and customer support functions. |
| • | Sales subsidiaries in the United States, Germany, Japan, Taiwan, China and Singapore perform sales activities and provide local technical support to customers. |
| • | Sales of our products take place through one of the following two routes: |
1) LG Display Headquarters and overseas manufacturing subsidiaries g Overseas sales subsidiaries (USA/Germany/Japan/Taiwan/China/Singapore), etc. g System integrators and end-brand customers g End users
2) LG Display Headquarters and overseas manufacturing subsidiaries g System integrators and end-brand customers g End users
| • | Sales performance by sales route |
| Sales performance |
Sales route(1) | Ratio | ||||
| Overseas |
Overseas subsidiaries | 97.5 | % | |||
| Headquarters | 2.5 | % | ||||
| Overseas sales portion (overseas sales / total sales) |
95.2 | % | ||||
| Korea |
Overseas subsidiaries | 36.1 | % | |||
| Headquarters | 63.9 | % | ||||
| Korea sales portion (Korea sales / total sales) |
4.8 | % | ||||
| (1) | Percentage by sales route is based on revenue from the Display business segment. |
11
| C. | Sales methods and sales terms |
| • | Direct sales and sales through overseas subsidiaries, etc. Sales terms are subject to change depending on the fluctuation in the supply and demand. |
| D. | Sales strategy |
| • | With respect to television products, we are expanding the premium television market with our OLED televisions and working towards strengthening our business portfolio and reinforcing consumer values through new businesses such as gaming and transparent products. We are also securing business stability in the LCD market with products that are commercially differentiated while mainly targeting global customers. |
| • | With respect to IT products, we are securing stable sales by having major global personal computer and home electronics manufacturers as our primary customer base, and we are also continually strengthening the sales of high-resolution, IPS, narrow bezel and other high-end display panels for monitors, notebook computers and tablets. |
| • | With respect to automotive display products, we are pursuing a stable order-based business with global automobile manufacturers on the basis of sustained profitable growth. By leveraging our existing technologies, including OLED and LCD, and expanding our OLED technology platform, we are strengthening our business portfolio and securing stable growth based on profitability. |
| • | With respect to a wide range of products including smartphones, wearable devices, commercial products (including interactive whiteboards and video wall displays, among others) and industrial products (including aviation and medical equipment, among others), we are continuing to build a strong and diversified business portfolio and expand our global customer base by leveraging the strength of our differentiated technology and products. |
| E. | Major customers |
| • | Customers “A” and “B” each accounted for more than 10% of our sales revenue in the first quarter of 2024 and the first quarter of 2023. Our sales revenue derived from our top ten customers comprised 88% of our total sales revenue in each of the first quarter of 2024 and the first quarter of 2023. |
| 6. | Purchase Orders |
| • | We supply some of our products in accordance with the production plans of automobile manufacturers. However, the volume of our supply is subject to fluctuation depending on the customers’ actual order volume and future market conditions, and it is not possible to accurately predict the changes in demand resulting from changes in the domestic and global economic environment. Moreover, as of March 31, 2024, we do not have purchase order contracts that recognize revenue by measuring progress towards satisfaction of performance obligation by using the cost-based input method. |
| 7. | Risk Management and Derivative Contracts |
| A. | Risk management |
| (1) | Major market risks |
Our business is exposed to credit risk, liquidity risk and market risk. Accordingly, we operate a risk management system that identifies and analyzes these risks while monitoring and managing risk level by establishing appropriate risk controls in order to ensure that such risks do not exceed certain threshold levels.
12
Market risk refers to the risk that income from the financial instruments that we hold or the fair value of such financial instruments will fluctuate due to fluctuations in market prices, such as exchange rates, interest rates and prices of equity securities. The objective of our market risk management system is to manage and control our exposure to market risk within an acceptable level while optimizing our profit levels.
| (2) | Risk management method |
As the average selling prices of OLED and TFT-LCD panels can continue to decline over time irrespective of industry-wide cyclical fluctuations, we may find it hard to manage risks associated with certain factors that are outside our control. However, we counteract such declines in average selling prices by increasing the proportion of high value added panels in our product mix while also implementing various cost reduction measures.
In addition, in order to manage our risk against foreign currency fluctuations, we eliminate such risk by adopting a policy of maintaining our net exposure risk within an acceptable level by buying or selling foreign currencies at spot rates, when necessary, to address short-term imbalances in the inflow and outflow of foreign currency funds. We also continually monitor our currency position and risk for other monetary assets and liabilities denominated in foreign currencies, and when needed, we may from time to time enter into cross-currency interest rate swap contracts and foreign currency forward contracts. Furthermore, we have adopted a policy aimed at minimizing uncertainty and financial costs arising from interest rate fluctuations and manage our interest rate risk through periodic monitoring of interest rate trends and adoption of appropriate countermeasures.
| B. | Derivative contracts |
| (1) | Currency risks |
| • | We are exposed to currency risks on sales, purchases and borrowings that are denominated in currencies other than in Won, our functional currency. These currencies are primarily the U.S. dollar, the Chinese Yuan and the Japanese Yen. |
| • | Interest on borrowings is denominated in the currency of the borrowing. Generally, borrowings are denominated in currencies that match the cash flows generated by our underlying operations, primarily in Won, the U.S. dollar and the Chinese Yuan. |
| • | As of the end of the reporting period, in order to avoid risks of exchange rate fluctuations on the fair value of
advance received, we entered into long position currency forward contracts of USD 1,200 million with Standard Chartered Bank and others. As of the end of the reporting period, among the valuation gains and losses of derivatives to which fair
value hedge accounting is applied, there is no ineffective portion, and we recognized a valuation gain of |
| • | As of the end of the reporting period, in order to avoid risks of interest rate fluctuations and exchange rate
fluctuations on foreign currency denominated borrowings with floating interest rates, we entered into an aggregate of USD 2,093 million and CNY 345 million cross currency interest swap agreements with KB Kookmin Bank and others, for which
we have not applied hedge accounting. Any rights or obligations arising from derivative contracts that do not apply hedge accounting are measured at fair value and are accounted for as assets and liabilities, whereas any resulting valuation gain or
loss is recognized as profit or loss at the time such valuation gain or loss is incurred. We recognized a gain on valuation of derivative instruments in the amount of |
13
| (2) | Interest rate risks |
| • | Our exposure to interest rate risks relates primarily to our floating rate long term loan obligations. We have established and are managing interest rate risk policies to minimize uncertainty and costs associated with interest rate fluctuations by monitoring cyclical interest rate fluctuations and enacting countermeasures. |
| • | As of the end of the reporting period, we entered into an aggregate of |
| 8. | Major Contracts |
Our material contracts, other than contracts entered into in the ordinary course of business, are set forth below:
| Type of agreement |
Name of party |
Term |
Content | |||
| Technology licensing/supply agreement |
Hewlett-Packard | January 2011 ~ | Patent licensing of semi-conductor device technology | |||
| Ignis Innovation, Inc. | July 2016 ~ | Patent licensing of OLED related technology | ||||
| HannStar Display Corporation | December 2013 ~ | Patent cross-licensing of LCD technology | ||||
| AU Optronics Corporation | August 2011~ | Patent cross-licensing of LCD technology | ||||
| Innolux Corporation | July 2012 ~ | Patent cross-licensing of LCD technology | ||||
| Universal Display Corporation | January 2015 ~ December 2025 | Patent licensing of OLED related technology | ||||
| Semiconductor Energy Laboratory | January 2021 ~ December 2030 | Patent licensing of LCD and OLED related technology |
| 9. | Research & Development (“R&D”) |
| A. | Summary of R&D-related expenditures |
(Unit: In millions of Won, except percentages)
| Items |
2024 Q1 | 2023 | 2022 | |||||||||||
| R&D Expenditures (prior to deducting governmental subsidies) |
669,338 | 2,399,513 | 2,431,590 | |||||||||||
| Governmental Subsidies |
(58 | ) | (718 | ) | (1,008 | ) | ||||||||
|
|
|
|
|
|
|
|||||||||
| Net R&D-Related Expenditures |
669,280 | 2,398,795 | 2,430,582 | |||||||||||
|
|
|
|
|
|
|
|||||||||
| Accounting Treatment(1) |
R&D Expenses | 526,475 | 1,906,616 | 1,927,828 | ||||||||||
| Development Cost (Intangible Assets) | 142,805 | 492,179 | 502,754 | |||||||||||
|
|
|
|
|
|
|
|||||||||
| R&D-Related
Expenditures / Revenue Ratio(2) |
12.7 | % | 11.2 | % | 9.3 | % | ||||||||
|
|
|
|
|
|
|
|||||||||
| (1) | For accounting treatment purposes, R&D expenses are presented as research and development expenses in our statements of comprehensive income, net of amortization of capitalized intangible asset development costs. |
| (2) | Calculated based on the R&D-related expenditures before subtracting government subsidies (state subsidies). |
14
| B. | R&D achievements |
Achievements in 2022
| (1) | Developed the world’s first 16:18 aspect ratio monitor product (27.6” SDQHD) |
| • | Developed a 27.6” (21.5”, 21.5”, vertical arrangement) monitor product, which is optimized for multi-tasking amid the increase in working remotely as a result of the COVID-19 pandemic |
| • | Created a new market through the development of a new aspect ratio (16:18, 2560x2880) product |
| (2) | Developed our first three-sided “Borderless” notebook panel product (13.4” WU XPS) |
| • | Led the high-end market by adopting a new, three-sided borderless design applying low power consumption variable refresh rate technology |
| (3) | Developed the world’s first 97” OLED TV product |
| • | Developed a product that outperforms competitors’ products both in display quality and in size in the high-end market |
| • | Strengthened the global trend towards OLED dominance by expanding our extra-large OLED TV product lineup and secured related original technology |
| (4) | Developed the world’s first Curved 1,900R Black monitor product (34”) |
| • | Developed the world’s first IPS Black Curved monitor product (contrast ratio 2000:1) by utilizing nega-LC material |
| • | Led the high-end Curved product market |
| (5) | Developed our first 12.3” cluster product utilizing VDA 3D technology |
| • | Utilizing VDA (Viewing Distance Adaption) technology, developed a 12.3” cluster product that applies glassless 3D technology and changes the user’s viewing distance while driving |
| (6) | Developed the world’s first 12.3” cluster product utilizing DLC technology |
| • | Utilizing DLC (Double LGP Control) technology, developed a 12.3” cluster product which display is, when positioned in the passenger seat, visually recognizable from the passenger seat but not from the driver’s seat. |
| (7) | Developed the world’s first META technology-applied product (gaming products: 27”, 45”; and television products: 4K 77/65/55”, 8K 77”) |
| • | Utilizing the development of META OLED technology, entered the gaming monitor market and strengthened flagship leadership in the premium TV market |
1) Gaming product (27”, 45”): Secured high PPI luminance performance based on the META technology and provided a display optimized for gaming through high-speed (240 Hz), fast response time (0.03ms) and curved technology
2) Large television (4K/8K): Developed product with world’s best picture quality (luminance/viewing angle) based on META technology
| (8) | Developed the world’s first IPS Gaming FHD 480Hz monitor product (24.5”) |
| • | Applied high-performance Oxide-TFT BCE-4 cell to 480Hz FHD screens |
| • | Received the 2023 CES Award in Best Innovation / Gaming / Computer Accessory category |
15
Achievements in 2023
| (1) | Developed the world’s first small- and medium-sized transparent WOLED product (30” HD) |
| • | Expanded market coverage with the development of a new product size (30”) for transparent small- and medium-sized display |
| • | Strengthened market leadership through achieving a transparency rate of 45% and increased luminance (600/200 nit) |
| (2) | Introduced the world’s first foldable pen touch notebook (17”) |
| • | Developed OLED panel for notebooks utilizing differentiated technologies such as the tandem OLED and a special folding structure |
| (3) | Developed the world’s first Gaming OLED 240Hz monitor product (39”, 34”) |
| • | Applied high-speed (240Hz), fast response time (0.03ms), high-luminance (275 nit @APL 100%) and curved (800R) OLED technology |
| • | Provided ultra-wide (21:9 aspect ratio) full-size OLED Gaming monitor product (initially provided in 45” and expanded further to provide 39” and 34” products) |
| 10. | Intellectual Property |
As of March 31, 2024, our cumulative patent portfolio (including patents that have already expired) included 28,399 patents in Korea and 34,540 patents in other countries. In 2024, we registered 622 patents in Korea and 667 patents in other countries.
| 11. | Environmental and Safety Matters |
In order to minimize the environmental impact of our business activities, we are actively responding to environmental regulations applicable to our products and business sites.
| A. | Business environment management |
We have installed and operate various types of prevention facilities to minimize the emission of environmental pollutants generated in our production process. With respect to air and water pollutants, we set and manage our internal standard at 70% of the permitted levels under the regulatory emission standards. In addition, in order to establish a resource circulation system, we operate a proprietary system to monitor waste from its generation to treatment, have developed waste treatment technology and identified suitable recycling companies to reduce the amount of waste we generate and maximize recycling.
In addition, as we were designated a target company for the greenhouse gas emission trading system in 2015, we allocate and monitor our greenhouse gas emissions every year. In order to continually promote the reduction of greenhouse gas emissions, we have set a medium- to long-term goal to reduce the emission level by continually investing in facility improvements and monitoring our emission levels.
We are subject to a variety of environmental laws and regulations, and operations at our manufacturing plants are subject to regulation and periodic scheduled and unscheduled on-site inspections by the Ministry of Environment and local environmental protection authorities. The primary types of environmental laws applicable to us include the following:
| (1) | Environmental pollutant emission regulations: Integrated Control of Pollutant-discharging Facilities Act, Clean Air Conservation Act, Water Quality Conservation Act, Wastes Control Act, Environmental Impact Assessment Act, etc. |
| (2) | Greenhouse gas emission management: Framework Act on Carbon Neutral and Green Growth to Respond to Climate Crisis, Act on the Allocation and Trading of Greenhouse Gas Emission Permits, etc. |
| (3) | Other workplace environment management: Chemicals Control Act, Chemicals Registration and Evaluation Act, Soil Environment Conservation Act, etc. |
16
Through the implementation of an environmental and energy management system, we are continuously making efforts to minimize environmental impact and reduce energy usage in all aspects of our business process. Accordingly, we have acquired and currently operate the environmental management system ISO14001 and energy management system ISO 50001 certifications for all of our domestic and overseas production sites. In addition, we have established company-wide safety, healthy, energy and environment management policies and manuals, which are regularly updated based on international standards. We also conduct systematic management of our business process in accordance with international standards through annual follow-up and renewal audits.
In recognition of our efforts, we were awarded the highest level, Leadership A, and received the grand prize award at the CDP Water Korea Best Awards in 2016 from the Carbon Disclosure Project, which was presided over by the Carbon Disclosure Project Korea Committee. Since then, we have continued to maintain our excellence in water conservation activities and received Leadership A recognition from 2018 to 2022. In addition, we have also received the Carbon Management Honors Club award from 2017 to 2020 and the Carbon Management Sector Honors from 2016 to 2022 in recognition of our continued greenhouse gas emission reduction activities.
In addition, in recognition of our efforts toward recycling rate improvement and waste reduction, we were nominated as a leading company with an excellent performance in resource circulation and received a commendation from the Minister of Environment in 2020. Our overseas subsidiary in Yantai earned Platinum Zero Waste to Landfill (“ZWTL”) validation in 2021, and all of our domestic production facilities earned Gold ZWTL validation (above 95% recycling rate), and our overseas subsidiary in Nanjing earned Platinum validation in 2022. In 2022, we introduced a resource recirculation recognition program in accordance with the Korean government’s waste management policy and received circular resource certification on eight types of our discarded trays and vinyl. In 2023, we have obtained quality certification for certain of our recycled items recognized as circular resources, and we plan to continue to promote the resource circulation of our products. We will continue our efforts to reinforce our resource circulation program by minimizing waste and maximizing recycling rate.
We have continued to pursue ESG management activities based on the spirit of “value creation for consumers” and “human-first management,” and we plan to obtain further recognition for our eco-friendly management and share relevant information with the stakeholders.
| B. | Product environment management |
In order to respond to applicable domestic and overseas environmental regulations, such as the European Union’s Restriction of Hazardous Substances (RoHS) and Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) that restrict the use of certain hazardous substances, we operate a hazardous substance management program that implements a four-step procedure (each such step, a “Gate”) that manages various stages of our production cycle, beginning with the registration process of our business partners up to the mass production stage. In addition, in order to preemptively address four types of phthalate substances that became additionally regulated pursuant to the RoHS in 2016 and officially went into effect on July 22, 2019, we replaced the latent risk elements in advance as well as implemented a more stable management process with respect to such substances. In implementing this process, we collaborated with external agencies to ascertain regulatory trends and establish our response strategy, and we formulated and applied effective management measures through the collaborative efforts of our development, procurement, quality assurance and analysis teams.
- Gate 01 (Business Partner Stage): An audit is conducted prior to the registration of a new business partner (including the inspection of the business partner’s hazardous substance response process)
- Gate 02 (Parts Development Stage): An environmental evaluation of each part under development is conducted (consisting of three stages: (1) document review; (2) XRF test and (3) precision analysis)
17
- Gate 03 (Product Development Stage): An environmental evaluation of the product model and product labeling are conducted (including RoHS verification)
- Gate 04 (Mass Production Stage): Process management through the periodic testing of mass-produced parts for any hazardous substances (including rate-based tests based on risk assessment)
We operate a “Hazardous Substance Management System for Products” that effectively manages hazardous substances by classifying them into four levels: A-I, A-II, B-I, and B-II. In particular, in addition to substances prohibited by global hazardous substance regulations on products, we have designated substances causing harm to the human body and the environment as Level B substances. By developing alternative technologies and parts and applying them to our products, we continually strive to achieve a gradual reduction and elimination of non-prohibited hazardous substances.
- Level A-I (Prohibited Substances): Prohibited substances designated under the RoHS regulations (i.e., 10 regulated substances) and those designated by specific customers
- Level A-II (Prohibited Substances): Substances prohibited by regulations and conventions other than those covered under Level A-1 and those designated as such by customers
- Level B-I (Substances Subject to Voluntary Reduction): Substances that are being voluntarily replaced over a certain period of time
- Level B-II (Substances Under Observation): Substances that are not currently banned, but are expected to become prohibited in the future
Moreover, we participated in reforming IEC 62321, an international testing standard published by the International Electrotechnical Commission and used by RoHS, and the commission adopted our halogen-free combustion ion chromatography method in as IEC 62321-3-2, which was published in June 2013.
In 2017, we became the first display panel company to receive the SGS Eco Label accreditation for OLED television display modules from SGS, a global product testing/accreditation agency, and have since continually received such accreditation. In 2022, we expanded our accreditation program to cover display modules for monitors, notebook computers, tablets and automobiles, as a result of which our display modules for monitors and notebook computers received SGS Eco Label accreditation for the first time and our automotive display module became the first in the industry to receive the same accreditation for its excellence in energy efficiency, and we have since maintained the SGS Eco Label for such products. In 2023, our high-end LCD panels for 16-inch notebooks and 27-inch monitors, in which we incorporated recycled materials for the first time, received the SGS Eco Label accreditation. In addition, our 30-inch and 55-inch transparent display products, for which we applied hazardous substance reduction technology, became the first in the industry to receive the SGS Eco Label accreditation. Moreover, in 2022, our 27-inch monitor display product that applied anti-bacterial films received the SGS Performance Mark accreditation for its anti-bacterial performance, and in 2023, our commercial display module that applied Plus-Bright energy consumption reduction technology obtained the SGS Performance Mark accreditation for its energy efficiency performance. Our high-end LCD panels for 16-inch notebooks and 27-inch monitors also received the same accreditation for reducing energy consumption through the implementation of proprietary algorithms and improving panel transmittance.
Also in 2022, upon assessment and verification of GHG emissions throughout its entire product life cycle, our OLED TV panel received the industry’s first Carbon Footprint Certification from The Carbon Trust, a not-for-profit company founded by the United Kingdom government that provides voluntary carbon certification services and carbon labeling schemes. In 2023, our high-end IT LCD panels (27-inch and smaller) received the Product Carbon Footprint (PCF) certification from TÜV Rheinland, a global independent testing, inspection and certification agency, by achieving carbon emission reduction through the application of recycled materials and low energy consumption technologies. Our OLED panels for automotive products also received the same certification for achieving carbon emission through the application of light-control film integration technology.
In 2021, we received the “Green Technology Certification” for our advanced incell touch display technology, an eco-friendly technology with touch-sensing electrodes and transmission lines that reduce carbon emissions and the use of rare metals. Also, since 2021, we have continued to obtain an eco-friendly certification from TUV SUD, a globally recognized accreditation agency, for excellence in resource circulation and non-use of specific hazardous substances in our OLED television and PO mobile models.
18
In 2018, we became the first display panel company to receive the “Green Technology Certification” from the Korean Ministry of Science and ICT for improving the light efficiency technology of OLED to promote energy use reduction. In 2017, for the IPS Nano Color for LCD, we received the Quality & Performance Mark from Intertek, a global product testing/accreditation agency, by applying a technology to eliminate cadmium (Cd) and indium phosphide (InP).
| C. | Safety standards |
Our products comply with the IEC 62638-1 global product safety standards, and we obtain CB and UL certifications on applicable products.
In order to promote the enhancement of safety for automobile manufacturers and consumers, we became the first display panel company in June 2016 to introduce a flame-resistant certification program for our display panels, which program includes flame resistance standards for automotive materials (including ISO 3795, DIN 75200 and FMVSS 302 standards) as well as for safety standards for information technology devices, which has been certified by TUV SUD. In 2022, we expanded the number of applicable flame resistance standards for such program from three to nine.
Furthermore, in 2021, we established infrastructure for flammability tests required under the United States Federal Aviation Administration’s FAR 25.853 standards and impact tests under RTCA DO-313 standards, and the reliability of these test results have been certified by TUV SUD.
| D. | Green management |
This information is omitted in quarterly reports in accordance with Korean disclosure rules, and we plan to include such information in our semi-annual and annual reports.
| E. | Status of sanctions |
This information is omitted in quarterly reports in accordance with Korean disclosure rules, and we plan to include such information in our semi-annual and annual reports.
| 12. | Financial Information |
| A. | Financial highlights (Based on consolidated K-IFRS). |
(Unit: In millions of Won)
| Description |
As of March 31, 2024 |
As of December 31, 2023 |
As of December 31, 2022 |
|||||||||
| Current assets |
10,190,020 | 9,503,186 | 9,444,035 | |||||||||
| Quick assets |
6,820,693 | 6,975,458 | 6,571,117 | |||||||||
| Inventories |
3,369,327 | 2,527,728 | 2,872,918 | |||||||||
| Non-current assets |
25,922,769 | 26,256,112 | 26,241,984 | |||||||||
| Investments in equity accounted investees |
85,323 | 84,329 | 109,119 | |||||||||
| Property, plant and equipment, net |
19,676,122 | 20,200,332 | 20,946,933 | |||||||||
| Intangible assets |
1,720,046 | 1,773,955 | 1,752,957 | |||||||||
| Other non-current assets |
4,441,278 | 4,197,496 | 3,432,975 | |||||||||
| Total assets |
36,112,789 | 35,759,298 | 35,686,019 | |||||||||
| Current liabilities |
13,865,383 | 13,885,028 | 13,961,520 | |||||||||
| Non-current liabilities |
12,706,983 | 13,103,726 | 10,405,272 | |||||||||
| Total liabilities |
26,572,366 | 26,988,754 | 24,366,792 | |||||||||
| Share capital |
2,500,000 | 1,789,079 | 1,789,079 | |||||||||
| Share premium |
2,821,006 | 2,251,113 | 2,251,113 | |||||||||
| Retained earnings |
1,889,974 | 2,676,014 | 5,359,769 | |||||||||
| Other equity |
727,279 | 515,976 | 479,628 | |||||||||
| Non-controlling interest |
1,602,164 | 1,538,362 | 1,439,638 | |||||||||
| Total equity |
9,540,423 | 8,770,544 | 11,319,227 | |||||||||
19
(Unit: In millions of Won, except for per share data and number of consolidated entities)
| Description |
For the three months ended March 31, 2024 |
For the year ended December 31, 2023 |
For the year ended December 31, 2022 |
|||||||||
| Revenue |
5,252,975 | 21,330,819 | 26,151,781 | |||||||||
| Operating profit (loss) |
(469,432 | ) | (2,510,164 | ) | (2,085,047 | ) | ||||||
| Profit (loss) from continuing operations |
(761,276 | ) | (2,576,729 | ) | (3,195,585 | ) | ||||||
| Profit (loss) for the period |
(761,276 | ) | (2,576,729 | ) | (3,195,585 | ) | ||||||
| Profit (loss) attributable to: |
||||||||||||
| Owners of the company |
(783,157 | ) | (2,733,742 | ) | (3,071,565 | ) | ||||||
| Non-controlling interest |
21,881 | 157,013 | (124,020 | ) | ||||||||
| Basic earnings (loss) per share |
(2,037 | ) | (7,640 | ) | (8,584 | ) | ||||||
| Diluted earnings (loss) per share |
(2,037 | ) | (7,640 | ) | (8,584 | ) | ||||||
| Number of consolidated entities(1) |
22 | 22 | 22 | |||||||||
| (1) | The number of consolidated entities is based on the consolidated entities (including the parent company) as of the end of the reporting period. |
| B. | Financial highlights (Based on separate K-IFRS). |
(Unit: In millions of Won)
| Description |
As of March 31, 2024 |
As of December 31, 2023 |
As of December 31, 2022 |
|||||||||
| Current assets |
5,813,484 | 5,590,482 | 5,627,177 | |||||||||
| Quick assets |
3,544,814 | 3,809,523 | 3,702,583 | |||||||||
| Inventories |
2,268,670 | 1,780,959 | 1,924,594 | |||||||||
| Non-current assets |
24,736,922 | 24,141,930 | 23,631,862 | |||||||||
| Investments |
5,764,915 | 4,932,063 | 4,837,704 | |||||||||
| Property, plant and equipment, net |
13,170,850 | 13,584,247 | 14,044,844 | |||||||||
| Intangible assets |
1,632,334 | 1,683,029 | 1,635,181 | |||||||||
| Other non-current assets |
4,168,823 | 3,942,591 | 3,114,133 | |||||||||
| Total assets |
30,550,406 | 29,732,412 | 29,259,039 | |||||||||
| Current liabilities |
17,593,470 | 16,422,259 | 16,043,011 | |||||||||
| Non-current liabilities |
6,873,801 | 7,628,598 | 5,865,589 | |||||||||
| Total liabilities |
24,467,271 | 24,050,857 | 21,908,600 | |||||||||
| Share capital |
2,500,000 | 1,789,079 | 1,789,079 | |||||||||
| Share premium |
2,821,006 | 2,251,113 | 2,251,113 | |||||||||
| Retained earnings |
762,129 | 1,641,363 | 3,310,247 | |||||||||
| Other equity |
0 | 0 | 0 | |||||||||
| Total equity |
6,083,135 | 5,681,555 | 7,350,439 | |||||||||
20
(Unit: In millions of Won, except for per share data)
| Description |
For the three months ended March 31, 2024 |
For the year ended December 31, 2023 |
For the year ended December 31, 2022 |
|||||||||
| Revenue |
5,137,018 | 19,811,015 | 24,131,172 | |||||||||
| Operating profit (loss) |
(644,820 | ) | (3,884,121 | ) | (3,201,463 | ) | ||||||
| Profit (loss) from continuing operations |
(876,445 | ) | (1,718,701 | ) | (3,191,387 | ) | ||||||
| Profit (loss) for the period |
(876,445 | ) | (1,718,701 | ) | (3,191,387 | ) | ||||||
| Basic earnings (loss) per share |
(2,280 | ) | (4,803 | ) | (8,919 | ) | ||||||
| Diluted earnings (loss) per share |
(2,280 | ) | (4,803 | ) | (8,919 | ) | ||||||
| C. | Consolidated subsidiaries (as of March 31, 2024) |
| Company Interest |
Primary Business | Location | Equity | |||||
| LG Display America, Inc. |
Sales | U.S.A. | 100 | % | ||||
| LG Display Germany GmbH |
Sales | Germany | 100 | % | ||||
| LG Display Japan Co., Ltd. |
Sales | Japan | 100 | % | ||||
| LG Display Taiwan Co., Ltd. |
Sales | Taiwan | 100 | % | ||||
| LG Display Nanjing Co., Ltd. |
Manufacturing | China | 100 | % | ||||
| LG Display Shanghai Co., Ltd. |
Sales | China | 100 | % | ||||
| LG Display Guangzhou Co., Ltd. |
Manufacturing | China | 100 | % | ||||
| LG Display Shenzhen Co., Ltd. |
Sales | China | 100 | % | ||||
| LG Display Singapore Pte. Ltd. |
Sales | Singapore | 100 | % | ||||
| L&T Display Technology (Fujian) Limited |
Manufacturing and sales | China | 51 | % | ||||
| LG Display Yantai Co., Ltd. |
Manufacturing | China | 100 | % | ||||
| Nanumnuri Co., Ltd. |
Workplace services | Korea | 100 | % | ||||
| LG Display (China) Co., Ltd. |
Manufacturing and sales | China | 70 | % | ||||
| Unified Innovative Technology, LLC |
Managing intellectual property | U.S.A. | 100 | % | ||||
| LG Display Guangzhou Trading Co., Ltd. |
Sales | China | 100 | % | ||||
| Global OLED Technology LLC |
Managing intellectual property | U.S.A. | 100 | % | ||||
| LG Display Vietnam Haiphong Co., Ltd. |
Manufacturing and sales | Vietnam | 100 | % | ||||
| Suzhou Lehui Display Co., Ltd. |
Manufacturing and sales | China | 100 | % | ||||
| LG Display Fund I LLC(1) |
Investing in new emerging companies |
U.S.A | 100 | % | ||||
| LG Display High-Tech (China) Co., Ltd. |
Manufacturing and sales | China | 70 | % | ||||
| (1) | During the reporting period, we invested an additional |
| D. | Status of equity investments (as of March 31, 2024) |
| (1) | Consolidated subsidiaries |
| Company |
Capital Stock (in millions) |
Date of Incorporation |
Equity Interest |
|||||||||
| LG Display America, Inc. |
USD | 411 | September 1999 | 100 | % | |||||||
| LG Display Germany GmbH |
EUR | 1 | October 1999 | 100 | % | |||||||
| LG Display Japan Co., Ltd. |
JPY | 95 | October 1999 | 100 | % | |||||||
21
| Company |
Capital Stock (in millions) |
Date of Incorporation |
Equity Interest |
|||||||||
| LG Display Taiwan Co., Ltd. |
TWD | 116 | April 1999 | 100 | % | |||||||
| LG Display Nanjing Co., Ltd. |
CNY | 3,020 | July 2002 | 100 | % | |||||||
| LG Display Shanghai Co., Ltd. |
CNY | 4 | January 2003 | 100 | % | |||||||
| LG Display Guangzhou Co., Ltd. |
CNY | 1,655 | June 2006 | 100 | % | |||||||
| LG Display Shenzhen Co., Ltd. |
CNY | 4 | July 2007 | 100 | % | |||||||
| LG Display Singapore Pte. Ltd. |
USD | 1 | November 2008 | 100 | % | |||||||
| L&T Display Technology (Fujian) Limited |
CNY | 116 | December 2009 | 51 | % | |||||||
| LG Display Yantai Co., Ltd. |
CNY | 1,008 | March 2010 | 100 | % | |||||||
| Nanumnuri Co., Ltd. |
KRW | 800 | March 2012 | 100 | % | |||||||
| LG Display (China) Co., Ltd. |
CNY | 8,232 | December 2012 | 70 | % | |||||||
| Unified Innovative Technology, LLC |
USD | 9 | March 2014 | 100 | % | |||||||
| LG Display Guangzhou Trading Co., Ltd. |
CNY | 1 | April 2015 | 100 | % | |||||||
| Global OLED Technology LLC |
USD | 138 | December 2009 | 100 | % | |||||||
| LG Display Vietnam Haiphong Co., Ltd. |
USD | 600 | May 2016 | 100 | % | |||||||
| Suzhou Lehui Display Co., Ltd. |
CNY | 637 | July 2016 | 100 | % | |||||||
| LG Display Fund I LLC(1) |
USD | 76 | May 2018 | 100 | % | |||||||
| LG Display High-Tech (China) Co., Ltd. |
CNY | 15,600 | July 2018 | 70 | % | |||||||
| (1) | During the reporting period, we invested an additional |
| (2) | Affiliated companies |
| Company |
Carrying Amount (in millions) |
Date of Incorporation |
Equity Interest |
|||||||||
| Paju Electric Glass Co., Ltd. |
January 2005 | 40 | % | |||||||||
| Wooree E&L Co., Ltd. |
June 2008 | 13 | % | |||||||||
| YAS Co., Ltd. |
April 2002 | 16 | % | |||||||||
| Avatec Co., Ltd. |
August 2000 | 14 | % | |||||||||
| Arctic Sentinel, Inc. |
— | June 2008 | 10 | % | ||||||||
| Cynora GmbH |
— | March 2003 | 10 | % | ||||||||
| Material Science Co., Ltd.(1) |
January 2014 | 15 | % | |||||||||
| (1) | During the three months ended March 31, 2024, our equity interest in Material Science Co., Ltd. decreased from 16% to 15% due to a decrease in the investee’s treasury shares. |
Although our respective share interests in Wooree E&L Co., Ltd., YAS Co., Ltd., Avatec Co., Ltd., Arctic Sentinel, Inc., Cynora GmbH and Material Science Co., Ltd. are below 20%, we are able to exercise significant influence through our right to appoint a director to the board of directors of each investee. Accordingly, the investments in these investees have been accounted for using the equity method.
For the
three months ended March 31, 2024 and 2023, the aggregate amount of dividends we received from our affiliated companies was W200 million and W15,200 million, respectively.
22
| 13. | Audit Information |
| A. | Audit service |
(Unit: In millions of Won, hours)
| Description |
2024 Q1 | 2023 | 2022 | |||
| Auditor |
Samil PwC | KPMG Samjong | KPMG Samjong | |||
| Activity |
Audit by independent auditor |
Audit by independent auditor |
Audit by independent auditor | |||
| Compensation(1) |
1,800 (650)(2) | 1,640 (590)(2) | 1,557 (575)(2) | |||
| Time required(3) |
2,620 | 21,246 | 21,238 |
| (1) | Compensation amount is the contracted amount for the full fiscal year. |
| (2) | Compensation amount in ( ) is for Form 20-F filing and SOX 404 audit. |
| (3) | Figures are based on actual performance as of the date of this report. |
| B. | Non-audit service |
| Period |
Date of contract | Description of service |
Period of service | Compensation | ||||
| 2024 Q1 |
February 2024 | Tax advice | March 2024 ~ December 2024 | |||||
| 2023 |
— | — | — | — | ||||
| 2022 |
— | — | — | — |
| * | Based on direct contracts on a separate basis. |
| 14. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
This information is omitted in quarterly and semi-annual reports in accordance with Korean disclosure rules, and we plan to include such information in our annual report.
| 15. | Board of Directors |
This information is omitted in quarterly reports in accordance with Korean disclosure rules, and we plan to include such information in our semi-annual and annual reports.
| 16. | Information Regarding Shares |
| A. | Total number of shares |
| (1) | Total number of shares authorized to be issued (as of March 31, 2024): 500,000,000 shares. |
| (2) | Total shares issued and outstanding (as of March 31, 2024): 500,000,000 shares. |
| B. | Shareholder list |
| (1) | Largest shareholder and related parties as of March 31, 2024: |
| Name |
Relationship |
Number of shares of common stock |
Equity interest |
|||||||
| LG Electronics(1) |
Largest shareholder | 183,593,206 | 36.72 | % | ||||||
| (1) | The number of shares and equity interest held by LG Electronics reflect its participation in our paid-in capital increase in March 2024. |
| (2) | Shareholders who are known to us that own 5% or more of our shares as of March 31, 2024. |
| Beneficial owner |
Number of shares of common stock |
Equity interest | ||
| LG Electronics |
183,593,206 | 36.72% |
23
| 17. | Directors and Employees |
| A. | Directors |
| (1) | List of Members of Board of Directors |
| Name |
Position |
Shares of the Company held |
First appointed |
Term expires | ||||||
| Cheoldong Jeong |
Representative Director (non-outside), Chief Executive Officer and President | — | December 1, 2023 |
March 22, 2027 | ||||||
| Sung Hyun Kim |
Director (non-outside), Chief Financial Officer and Vice President | — | December 1, 2018 |
March 23, 2025 | ||||||
| Beom Jong Ha |
Non-standing Director and Member of Outside Director Nomination Committee | — | March 23, 2022 |
March 23, 2025 | ||||||
| Doocheol Moon |
Outside Director and Member of Audit Committee, Outside Director Nomination Committee and ESG Committee | — | March 23, 2021 |
March 22, 2027 | ||||||
| Chung Hae Kang |
Outside Director and Member of Audit Committee, Related Party Transaction Committee and ESG Committee | — | March 23, 2022 |
March 23, 2025 | ||||||
| Jungsuk Oh |
Outside Director and Member of Audit Committee, Outside Director Nomination Committee, Related Party Transaction Committee and ESG Committee | — | April 26, 2022 |
March 21, 2026 | ||||||
| Sang Hee Park |
Outside Director and Member of Audit Committee, Related Party Transaction Committee and ESG Committee | — | March 21, 2023 |
March 21, 2026 | ||||||
| (2) | Compensation of Directors |
This information is omitted in quarterly reports in accordance with Korean disclosure rules, and we plan to include such information in our semi-annual and annual reports.
| B. | Employees |
This information is omitted in quarterly reports in accordance with Korean disclosure rules, and we plan to include such information in our semi-annual and annual reports.
| 18. | Other Matters |
| A. | Legal proceedings |
We are a defendant in two separate civil lawsuits (comprising one damages claim in the United Kingdom filed by private plaintiffs and one damages claim in Israel filed by private plaintiffs) filed against us and certain other TFT-LCD panel manufacturers in connection with alleged anticompetitive behavior of the defendants. In each of these cases, the amount being sought has not been determined. The trial for the case in the United Kingdom was completed and the court’s ruling regarding the amount of our liability is expected in May 2024, while no trial has been scheduled for the case in Israel. While the expected outcome of each of these cases is unclear, we do not believe that any of these cases would have a material effect on our financial conditions.
24
| B. | Status of collateral pledged to related party |
On March 27, 2023, the Board of Directors resolved to borrow W1 trillion from our largest shareholder, LG Electronics, in
order to strengthen the competitiveness of our OLED business as well as for working capital purposes, and withdrew W650 billion of the principal amount of such borrowing on March 30, 2023 and the remaining
W350 billion on April 20, 2023. The repayment terms provide for a two-year grace period followed by a one-year repayment period in
installments with an interest rate of 6.06%. In addition, we pledged certain of our land and buildings equivalent to the sum of the principal and interest amount as collateral for such borrowing.
Moreover, deposits in the amount of CNY4,306 million (equivalent to the maximum amount of W799.8 billion) have been
pledged as collateral by LG Display Nanjing Co., Ltd. in connection with our borrowings in the amount of USD 200 million and W450 billion from Shinhan Bank and others.
| C. | Material events subsequent to the reporting period |
This information is omitted in quarterly reports in accordance with Korean disclosure rules, and we plan to include such information in our semi-annual and annual reports.
25
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Condensed Consolidated Interim Financial Statements
(Unaudited)
March 31, 2024 and 2023
(With Report on Review of Condensed Interim Financial Statements)
Report on Review of Condensed Interim Financial Statements
(English Translation of a Report Originally Issued in Korean)
To the Shareholders and Board of Directors of
LG Display Co., Ltd.
Reviewed Financial Statements
We have reviewed the accompanying condensed consolidated interim financial statements of LG Display Co., Ltd. and its subsidiaries (collectively referred to as the “Group”). These condensed consolidated interim financial statements consist of the consolidated interim statement of financial position of the Group as at March 31, 2024, and the related consolidated interim statements of comprehensive income, changes in equity and cash flows for the three-month period ended March 31, 2024, and material accounting policy information and other selected explanatory notes, expressed in Korean won.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and presentation of these condensed consolidated interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of condensed consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review.
We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe the accompanying condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.
Other Matters
The consolidated statements of comprehensive income, changes in equity and cash flows for the three-month period ended March 31, 2023, presented herein for comparative purposes, were reviewed by another auditor whose report dated May 12, 2023. Based on their review, nothing has come to their attention that causes them to believe the accompanying condensed financial statements do not present fairly, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.
1
The consolidated statement of financial position as at December 31, 2023, and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, not presented herein, were audited by another auditor who expressed an unqualified opinion on those statements on March 7, 2024. The consolidated statement of financial position as at December 31, 2023, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2023.
Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.
May 14, 2024
Seoul, Korea
This report is effective as of May 14, 2024, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.
2
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Interim Statements of Financial Position
As of March 31, 2024 and December 31, 2023
| (In millions of won) | Note | March 31, 2024 (unaudited) |
December 31, 2023 |
|||||||
| Assets |
||||||||||
| Cash and cash equivalents |
4, 25 | 2,257,522 | ||||||||
| Deposits in banks |
4, 25 | 653,248 | 905,971 | |||||||
| Trade accounts and notes receivable, net |
5, 15, 25, 27 | 2,944,680 | 3,218,093 | |||||||
| Other accounts receivable, net |
5, 25 | 83,849 | 126,985 | |||||||
| Other current financial assets |
6, 25 | 210,029 | 168,623 | |||||||
| Inventories |
7 | 3,369,327 | 2,527,728 | |||||||
| Prepaid income taxes |
39,235 | 44,505 | ||||||||
| Other current assets |
5 | 317,923 | 253,759 | |||||||
|
|
|
|
|
|||||||
| Total current assets |
10,190,020 | 9,503,186 | ||||||||
| Deposits in banks |
4, 25 | 11 | 11 | |||||||
| Investments in equity accounted investees |
8 | 85,323 | 84,329 | |||||||
| Other non-current financial assets |
6, 25 | 187,553 | 173,626 | |||||||
| Property, plant and equipment, net |
9, 18 | 19,676,122 | 20,200,332 | |||||||
| Intangible assets, net |
10, 18 | 1,720,046 | 1,773,955 | |||||||
| Investment Property |
11, 18 | 31,723 | 32,995 | |||||||
| Deferred tax assets |
23 | 3,819,307 | 3,562,861 | |||||||
| Defined benefits assets, net |
13 | 372,988 | 407,438 | |||||||
| Other non-current assets |
29,696 | 20,565 | ||||||||
|
|
|
|
|
|||||||
| Total non-current assets |
25,922,769 | 26,256,112 | ||||||||
|
|
|
|
|
|||||||
| Total assets |
35,759,298 | |||||||||
|
|
|
|
|
|||||||
| Liabilities |
||||||||||
| Trade accounts and notes payable |
25, 27 | 4,175,064 | ||||||||
| Current financial liabilities |
12, 25, 26 | 5,909,392 | 5,262,295 | |||||||
| Other accounts payable |
25 | 1,911,645 | 2,918,903 | |||||||
| Accrued expenses |
593,124 | 648,949 | ||||||||
| Income tax payable |
30,208 | 52,237 | ||||||||
| Provisions |
14 | 96,750 | 117,676 | |||||||
| Advances received |
840,699 | 625,838 | ||||||||
| Other current liabilities |
51,282 | 84,066 | ||||||||
|
|
|
|
|
|||||||
| Total current liabilities |
13,865,383 | 13,885,028 | ||||||||
| Non-current financial liabilities |
12, 25, 26, 27 | 11,213,215 | 11,439,776 | |||||||
| Non-current provisions |
14 | 56,022 | 63,805 | |||||||
| Defined benefit liabilities, net |
13 | 1,482 | 1,559 | |||||||
| Long-term advances received |
15 | 808,080 | 967,050 | |||||||
| Deferred tax liabilities |
23 | 1,646 | 2,069 | |||||||
| Other non-current liabilities |
25 | 626,538 | 629,467 | |||||||
|
|
|
|
|
|||||||
| Total non-current liabilities |
12,706,983 | 13,103,726 | ||||||||
|
|
|
|
|
|||||||
| Total liabilities |
26,572,366 | 26,988,754 | ||||||||
|
|
|
|
|
|||||||
| Equity |
||||||||||
| Share capital |
16 | 2,500,000 | 1,789,079 | |||||||
| Share premium |
16 | 2,821,006 | 2,251,113 | |||||||
| Retained earnings |
1,889,974 | 2,676,014 | ||||||||
| Reserves |
16 | 727,279 | 515,976 | |||||||
|
|
|
|
|
|||||||
| Equity attributable to owners of the Parent |
7,938,259 | 7,232,182 | ||||||||
|
|
|
|
|
|||||||
| Non-controlling interests |
1,602,164 | 1,538,362 | ||||||||
|
|
|
|
|
|||||||
| Total equity |
9,540,423 | 8,770,544 | ||||||||
|
|
|
|
|
|||||||
| Total liabilities and equity |
35,759,298 | |||||||||
|
|
|
|
|
|||||||
See accompanying notes to the condensed consolidated interim financial statements.
3
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Interim Statements of Comprehensive Loss
For the three-month periods ended March 31, 2024 and 2023
| (In millions of won, except loss per share amounts) | Note | 2024 (unaudited) |
2023 (unaudited) |
|||||||||
| Revenue |
17, 18, 27 | 4,411,056 | ||||||||||
| Cost of sales |
7, 19, 27 | (5,035,087 | ) | (4,794,490 | ) | |||||||
|
|
|
|
|
|||||||||
| Gross profit (loss) |
217,888 | (383,434 | ) | |||||||||
| Selling expenses |
19, 20 | (124,621 | ) | (137,625 | ) | |||||||
| Administrative expenses |
19, 20 | (222,952 | ) | (224,394 | ) | |||||||
| Research and development expenses |
19 | (339,747 | ) | (352,905 | ) | |||||||
|
|
|
|
|
|||||||||
| Operating loss |
(469,432 | ) | (1,098,358 | ) | ||||||||
|
|
|
|
|
|||||||||
| Finance income |
22 | 202,202 | 514,535 | |||||||||
| Finance costs |
22 | (407,708 | ) | (668,081 | ) | |||||||
| Other non-operating income |
21 | 431,888 | 383,350 | |||||||||
| Other non-operating expenses |
19, 21 | (748,145 | ) | (605,718 | ) | |||||||
| Equity in income of equity accounted investees, net |
1,847 | (567 | ) | |||||||||
|
|
|
|
|
|||||||||
| Loss before income tax |
(989,348 | ) | (1,474,839 | ) | ||||||||
| Income tax benefit |
23 | 228,072 | 321,739 | |||||||||
|
|
|
|
|
|||||||||
| Loss for the period |
(761,276 | ) | (1,153,100 | ) | ||||||||
|
|
|
|
|
|||||||||
| Other comprehensive income (loss) |
||||||||||||
| Items that will never be reclassified to profit or loss |
||||||||||||
| Remeasurements of net defined benefit liabilities |
13 | (2,789 | ) | (545 | ) | |||||||
| Other comprehensive income (loss) from associates |
(94 | ) | 170 | |||||||||
|
|
|
|
|
|||||||||
| (2,883 | ) | (375 | ) | |||||||||
| Items that are or may be reclassified to profit or loss |
||||||||||||
| Foreign currency translation differences for foreign operations |
16 | 253,528 | 363,105 | |||||||||
| Other comprehensive loss from associates |
16 | (304 | ) | (113 | ) | |||||||
|
|
|
|
|
|||||||||
| 253,224 | 362,992 | |||||||||||
|
|
|
|
|
|||||||||
| Other comprehensive income for the period, net of income tax |
250,341 | 362,617 | ||||||||||
|
|
|
|
|
|||||||||
| Total comprehensive loss for the period |
(790,483 | ) | ||||||||||
|
|
|
|
|
|||||||||
| Profit (loss) attributable to: |
||||||||||||
| Owners of the Parent |
(783,157 | ) | (1,213,777 | ) | ||||||||
| Non-controlling interests |
21,881 | 60,677 | ||||||||||
|
|
|
|
|
|||||||||
| Loss for the period |
(1,153,100 | ) | ||||||||||
|
|
|
|
|
|||||||||
| Total comprehensive income (loss) attributable to: |
||||||||||||
| Owners of the Parent |
(574,737 | ) | (912,258 | ) | ||||||||
| Non-controlling interests |
63,802 | 121,775 | ||||||||||
|
|
|
|
|
|||||||||
| Total comprehensive loss for the period |
(790,483 | ) | ||||||||||
|
|
|
|
|
|||||||||
| Loss per share (in won) |
||||||||||||
| Basic loss per share |
24 | (3,187 | ) | |||||||||
|
|
|
|
|
|||||||||
| Diluted loss per share |
24 | (3,187 | ) | |||||||||
|
|
|
|
|
|||||||||
See accompanying notes to the condensed consolidated interim financial statements.
4
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Interim Statements of Changes in Equity
For the three-month periods ended March 31, 2024 and 2023
| Attributable to owners of the Parent Company | ||||||||||||||||||||||||||||
| (In millions of won) | Share capital | Share premium |
Retained earnings |
Reserves | Sub-total | Non- controlling interests |
Total equity | |||||||||||||||||||||
| Balances at January 1, 2023 |
2,251,113 | 5,359,769 | 479,628 | 9,879,589 | 1,439,638 | 11,319,227 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total comprehensive income (loss) for the period |
||||||||||||||||||||||||||||
| Profit (loss) for the period |
— | — | (1,213,777 | ) | — | (1,213,777 | ) | 60,677 | (1,153,100 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Other comprehensive income (loss) |
||||||||||||||||||||||||||||
| Remeasurements of net defined benefit liabilities |
— | — | (545 | ) | — | (545 | ) | — | (545 | ) | ||||||||||||||||||
| Foreign currency translation differences |
— | — | — | 302,007 | 302,007 | 61,098 | 363,105 | |||||||||||||||||||||
| Other comprehensive income (loss) from associates |
— | — | 170 | (113 | ) | 57 | — | 57 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total other comprehensive income (loss) |
— | — | (375 | ) | 301,894 | 301,519 | 61,098 | 362,617 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total comprehensive income (loss) for the period |
— | (1,214,152 | ) | 301,894 | (912,258 | ) | 121,775 | (790,483 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balances at March 31, 2023 (unaudited) |
2,251,113 | 4,145,617 | 781,522 | 8,967,331 | 1,561,413 | 10,528,744 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balances at January 1, 2024 |
2,251,113 | 2,676,014 | 515,976 | 7,232,182 | 1,538,362 | 8,770,544 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total comprehensive income (loss) for the period |
||||||||||||||||||||||||||||
| Profit (loss) for the period |
— | — | (783,157 | ) | — | (783,157 | ) | 21,881 | (761,276 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Other comprehensive income (loss) |
||||||||||||||||||||||||||||
| Remeasurements of net defined benefit liabilities |
— | — | (2,789 | ) | — | (2,789 | ) | — | (2,789 | ) | ||||||||||||||||||
| Foreign currency translation differences |
— | — | — | 211,607 | 211,607 | 41,921 | 253,528 | |||||||||||||||||||||
| Other comprehensive income (loss) from associates |
— | — | (94 | ) | (304 | ) | (398 | ) | — | (398 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total other comprehensive income (loss) |
— | — | (2,883 | ) | 211,303 | 208,420 | 41,921 | 250,341 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total comprehensive income (loss) for the period |
— | (786,040 | ) | 211,303 | (574,737 | ) | 63,802 | (510,935 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Transaction with owners, recognized directly in equity |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Capital Increase |
710,921 | 569,893 | — | — | 1,280,814 | — | 1,280,814 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balances at March 31, 2024 (unaudited) |
2,821,006 | 1,889,974 | 727,279 | 7,938,259 | 1,602,164 | 9,540,423 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
See accompanying notes to the condensed consolidated interim financial statements.
5
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Interim Statements of Cash Flows
For the three-month periods ended March 31, 2024 and 2023
| (In millions of won) | Note | 2024 (unaudited) |
2023 (unaudited) |
|||||||||
| Cash flows from (used in) operating activities: |
26 | |||||||||||
| Cash used in operations |
26 | (152,190 | ) | (355,452 | ) | |||||||
| Income taxes paid |
(42,366 | ) | (19,675 | ) | ||||||||
| Interests received |
23,963 | 27,955 | ||||||||||
| Interests paid |
(242,611 | ) | (226,346 | ) | ||||||||
|
|
|
|
|
|||||||||
| Cash used in operating activities |
(573,518 | ) | ||||||||||
|
|
|
|
|
|||||||||
| Cash flows from (used in) investing activities: |
||||||||||||
| Increase in deposits in banks |
(286,678 | ) | ||||||||||
| Proceeds from withdrawal of deposits in banks |
269,949 | 408,189 | ||||||||||
| Acquisition of financial assets at fair value through profit or loss |
(331 | ) | (635 | ) | ||||||||
| Proceeds from disposal of financial asset at fair value through profit or loss |
66 | 191 | ||||||||||
| Acquisition of property, plant and equipment |
(891,608 | ) | (1,302,945 | ) | ||||||||
| Proceeds from disposal of property, plant and equipment |
26,684 | 375,459 | ||||||||||
| Acquisition of intangible assets |
(199,372 | ) | (146,031 | ) | ||||||||
| Proceeds from disposal of intangible assets |
34 | — | ||||||||||
| Government grants received |
2,227 | 2,803 | ||||||||||
| Proceeds from settlement of derivatives |
85,172 | 28,925 | ||||||||||
| Increase in short-term loans |
4,497 | 3,129 | ||||||||||
| Increase in deposits |
(1,336 | ) | (2,912 | ) | ||||||||
| Decrease in deposits |
527 | 1,252 | ||||||||||
| Proceeds from disposal other assets |
— | 1,464 | ||||||||||
|
|
|
|
|
|||||||||
| Cash used in investing activities |
(703,991 | ) | (917,789 | ) | ||||||||
|
|
|
|
|
|||||||||
| Cash flows from (used in) financing activities: |
26 | |||||||||||
| Proceeds from short-term borrowings |
1,654,638 | 2,591,199 | ||||||||||
| Repayments of short-term borrowings |
(1,820,607 | ) | (2,643,980 | ) | ||||||||
| Proceeds from issuance of bonds |
— | 336,160 | ||||||||||
| Repayments of bonds |
(80,000 | ) | (190,000 | ) | ||||||||
| Proceeds from long-term borrowings |
1,325,404 | 2,700,802 | ||||||||||
| Repayments of long-term borrowings |
(953,679 | ) | (944,102 | ) | ||||||||
| Payment of lease liabilities |
(18,091 | ) | (20,938 | ) | ||||||||
| Capital Increase |
1,292,455 | — | ||||||||||
| Transaction cost from capital increase |
(11,640 | ) | — | |||||||||
| Subsidiaries’ dividends distributed to non-controlling interests |
(7,302 | ) | — | |||||||||
|
|
|
|
|
|||||||||
| Cash from financing activities |
1,381,178 | 1,829,141 | ||||||||||
|
|
|
|
|
|||||||||
| Net increase in cash and cash equivalents |
263,983 | 337,834 | ||||||||||
| Cash and cash equivalents at January 1 |
2,257,522 | 1,824,649 | ||||||||||
| Effect of exchange rate fluctuations on cash held |
50,224 | 50,241 | ||||||||||
|
|
|
|
|
|||||||||
| Cash and cash equivalents at March 31 |
2,212,724 | |||||||||||
|
|
|
|
|
|||||||||
See accompanying notes to the condensed consolidated interim financial statements.
6
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 1. | Reporting Entity |
| (a) | Description of the Parent Company |
LG Display Co., Ltd. (the “Parent Company”) was incorporated in February 1985 and the Parent Company is a public corporation listed in the Korea Exchange since 2004. The main business of the Parent Company and its subsidiaries (the “Group”) is to manufacture and sell displays and its related products. As of March 31, 2024, the Group is operating Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China and Vietnam. The Parent Company is domiciled in the Republic of Korea with its address at 128 Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. As of March 31, 2024, LG Electronics Inc., a major shareholder of the Parent Company, owns 36.72% (183,593,206 shares) of the Parent Company’s common stock.
As of March 31, 2024, 500,000,000 shares of the Parent Company’s common stock is listed on Korea Exchange under the identifying code 034220, and 15,741,012 American Depository Shares (“ADSs”, 2 ADSs represent one share of common stock) is listed on the New York Stock Exchange under the symbol “LPL”.
7
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 1. | Reporting Entity, Continued |
| (b) | Consolidated Subsidiaries as of March 31, 2024 |
| (In millions) | ||||||||||||||||
| Subsidiaries |
Location | Percentage of ownership |
Closing | Date of |
Business |
Capital stocks | ||||||||||
| LG Display America, Inc. |
San Jose, U.S.A. | 100 | % | December | September 24, 1999 | Sales of display products | USD | 411 | ||||||||
| LG Display Germany GmbH |
Eschborn, Germany | 100 | % | December | October 15, 1999 | Sales of display products | EUR | 1 | ||||||||
| LG Display Japan Co., Ltd. |
Tokyo, Japan | 100 | % | December | October 12, 1999 | Sales of display products | JPY | 95 | ||||||||
| LG Display Taiwan Co., Ltd. |
Taipei, Taiwan | 100 | % | December | April 12, 1999 | Sales of display products | NTD | 116 | ||||||||
| LG Display Nanjing Co., Ltd. |
Nanjing, China | 100 | % | December | July 15, 2002 | Production of display products | CNY | 3,020 | ||||||||
| LG Display Shanghai Co., Ltd. |
Shanghai, China | 100 | % | December | January 16, 2003 | Sales of display products | CNY | 4 | ||||||||
| LG Display Guangzhou Co., Ltd. |
Guangzhou, China | 100 | % | December | June 30, 2006 | Production of display products | CNY | 1,655 | ||||||||
| LG Display Shenzhen Co., Ltd. |
Shenzhen, China | 100 | % | December | July 27, 2007 | Sales of display products | CNY | 4 | ||||||||
| LG Display Singapore Pte. Ltd. |
Singapore | 100 | % | December | November 4, 2008 | Sales of display products | USD | 1 | ||||||||
| L&T Display Technology (Fujian) Limited |
Fujian, China | 51 | % | December | December 7, 2009 | Production and sales of LCD module and LCD monitor sets | CNY | 116 | ||||||||
| LG Display Yantai Co., Ltd. |
Yantai, China | 100 | % | December | March 17, 2010 | Production of display products | CNY | 1,008 | ||||||||
| Nanumnuri Co., Ltd. |
Gumi, South Korea | 100 | % | December | March 21, 2012 | Business facility maintenance | KRW | 800 | ||||||||
| LG Display (China) Co., Ltd. |
Guangzhou, China | 70 | % | December | December 10, 2012 | Production and sales of display products | CNY | 8,232 | ||||||||
| Unified Innovative Technology, LLC |
Wilmington, U.S.A. | 100 | % | December | March 12, 2014 | Intellectual property management | USD | 9 | ||||||||
| LG Display Guangzhou Trading Co., Ltd. |
Guangzhou, China | 100 | % | December | April 28, 2015 | Sales of display products | CNY | 1 | ||||||||
| Global OLED Technology, LLC |
Sterling, U.S.A. | 100 | % | December | December 18, 2009 | OLED intellectual property management | USD | 138 | ||||||||
| LG Display Vietnam Haiphong Co., Ltd. |
Haiphong, Vietnam | 100 | % | December | May 5, 2016 | Production and sales of display products | USD | 600 | ||||||||
| Suzhou Lehui Display Co., Ltd. |
Suzhou, China | 100 | % | December | July 1, 2016 | Production and sales of LCD module and LCD monitor | CNY | 637 | ||||||||
| LG DISPLAY FUND I LLC (*) |
Wilmington, U.S.A. | 100 | % | December | May 1, 2018 | Investment in venture business and technologies | USD | 76 | ||||||||
| LG Display High-Tech (China) Co., Ltd. |
Guangzhou, China | 70 | % | December | July 11, 2018 | Production and sales of display products | CNY | 15,600 | ||||||||
| (*) | For the three-month period ended March 31, 2024, the Parent Company contributed
|
In addition to the above subsidiaries, the Parent Company has invested W925,100 million in MMT (Money Market
Trust), which is controlled by the Parent Company.
8
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 2. | Basis of Preparation |
The Group maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS). The accompanying (condensed) consolidated interim financial statements have been condensed, restructured and translated into English from the Korean language financial statements.
Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Group’s financial position, financial performance or cash flows, is not presented in the accompanying condensed consolidated interim financial statements.
| (a) | Application of accounting standards |
The Group’s condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard as adopted by the Republic of Korea (Korean IFRS) 1034, Interim Financial Reporting. These condensed consolidated interim financial statements do not include all of the information required for full annual consolidated financial statements and should be read in conjunction with the consolidated financial statements of the Group as of and for the year ended December 31, 2023.
| (b) | Basis of Measurement |
The condensed consolidated interim financial statements have been prepared on the historical cost basis except for the following material items in the consolidated statement of financial position:
| • | derivative financial instruments at fair value, financial assets at fair value through profit or loss (“FVTPL”), financial assets at fair value through other comprehensive income (“FVOCI”), financial liabilities at fair value through profit or loss (“FVTPL”), and |
| • | net defined benefit liabilities (defined benefit assets) recognized at the present value of defined benefit obligations less the fair value of plan assets |
| (c) | Functional and Presentation Currency |
Each subsidiary’s financial statements within the Group are presented in the subsidiary’s functional currency, which is the currency of the primary economic environment in which each subsidiary operates. The condensed consolidated interim financial statements are presented in Korean won, which is the Parent Company’s functional currency.
| (d) | Estimates and Judgments |
The preparation of the condensed consolidated interim financial statements in conformity with Korean IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
| (e) | Accounting standards and Interpretation issued and adopted by the Group |
The Group has applied the following new or amended accounting standards for the annual periods commencing January 1, 2024.
9
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 2. | Basis of Preparation, Continued |
| (e) | Accounting standards and Interpretation issued and adopted by the Group, Continued |
| (i) | Amendments to Korean IFRS 1001 Presentation of Financial Statements – Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants |
The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability includes the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. In addition, covenants that an entity is required to comply with after the end of the reporting period would not affect classification of a liability as current or non-current at the reporting date. When an entity classifies a liability that is subject to the covenants which an entity is required to comply with within twelve months of the reporting date as non-current at the end of the reporting period, the entity shall disclose information in the notes to understand the risk that non-current liabilities with covenants could become repayable within twelve months after the reporting period. The amendments do not have a significant impact on the financial statements.
| (ii) | Amendments to Korean IFRS 1007 Statement of Cash Flows, Korean IFRS 1107 Financial Instruments: Disclosures – Supplier finance arrangements |
When applying supplier finance arrangements, an entity shall disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk.
| (iii) | Amendments to Korean IFRS 1116 Leases – Lease Liability in a Sale and Leaseback |
When subsequently measuring lease liabilities arising from a sale and leaseback, a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee. The amendments do not have a significant impact on the financial statements.
| (iv) | Amendments to Korean IFRS 1001 Presentation of Financial Statements – Disclosure of Cryptographic Assets |
The amendments require an additional disclosure if an entity holds cryptographic assets, or holds cryptographic assets on behalf of the customer, or issues cryptographic assets. The amendments do not have a significant impact on the financial statements.
| (f) | Accounting standards and Interpretation issued but not yet adopted by the Group |
The Accounting standards and Interpretation issued that have been enacted or amended but have not been applied because the effective date has not arrived are as follows:
Amendments to Korean IFRS 1021 The Effects of Changes in Foreign Exchange Rates and 1101 First-time Adoption of International Financial Reporting Standards – Lack of Exchangeability
10
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 2. | Basis of Preparation, Continued |
| (f) | Accounting standards and Interpretation issued but not yet adopted by the Group, Continued |
When an entity estimates a spot exchange rate because exchangeability between two currencies is lacking, the entity shall disclose related information. The amendments should be applied for annual periods beginning on or after January 1, 2025, and earlier application is permitted. The Group is in review for the impact of these amendments on the financial statements.
| (g) | Income Tax Expense |
The Group is within the scope of the Pillar Two model rules, there is no additional income tax expenses recognized in relation to the rules and applied the exception to recognizing and disclosing information about deferred tax and assets and liabilities related to Pillar Two income Taxes.
| 3. | Accounting Policies |
The accounting policies followed by the Group in the preparation of its condensed consolidated interim financial statements are the same as those followed by the Group in its preparation of the consolidated financial statements as of and for the year ended December 31, 2023, except for the application of Korean IFRS 1034, Interim Financial Reporting.
| 4. | Cash and Cash Equivalents and Deposits in Banks |
Cash and cash equivalents and deposits in banks as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Current assets |
||||||||
| Cash and cash equivalents |
||||||||
| Cash |
3 | |||||||
| Deposits (*1) |
2,571,726 | 2,257,519 | ||||||
|
|
|
|
|
|||||
| Total |
2,257,522 | |||||||
|
|
|
|
|
|||||
| Deposits in banks |
||||||||
| Time deposits (*1) (*2) |
905,971 | |||||||
| Non-current assets |
||||||||
| Deposits in banks |
||||||||
| Deposit for checking account |
11 | |||||||
| (*1) | As of March 31, 2024, it includes deposits restricted in use of |
| (*2) | As of March 31, 2024, it includes funds for business cooperation of |
11
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 5. | Trade Accounts and Notes Receivable, Other Accounts Receivable and Others |
(a) Trade accounts and notes receivable as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Due from third parties, net |
2,827,163 | |||||||
| Due from related parties |
488,176 | 390,930 | ||||||
|
|
|
|
|
|||||
| Total |
3,218,093 | |||||||
|
|
|
|
|
|||||
(b) Other accounts receivable as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Current assets |
||||||||
| Non-trade receivables, net |
112,739 | |||||||
| Accrued income |
11,837 | 14,246 | ||||||
|
|
|
|
|
|||||
| Total |
126,985 | |||||||
|
|
|
|
|
|||||
Due from related parties included in other accounts receivable as of March 31, 2024 and December 31,
2023 are W3,035 million and W11,520 million, respectively.
12
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 5. | Trade Accounts and Notes Receivable, Other Accounts Receivable and Others, Continued |
(c) The aging of trade accounts and notes receivable and other accounts receivable as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | |||||||||||||||
| Original amount | Allowance for doubtful account | |||||||||||||||
| Trade accounts and notes receivable |
Other accounts receivable |
Trade accounts and notes receivable |
Other accounts receivable |
|||||||||||||
| Not past due |
81,378 | (979) | (187 | ) | ||||||||||||
| 1-15 days past due |
6,531 | 1,195 | — | (12 | ) | |||||||||||
| 16-30 days past due |
2,323 | 213 | (1 | ) | (2 | ) | ||||||||||
| 31-60 days past due |
— | 82 | — | (1 | ) | |||||||||||
| More than 60 days past due |
131 | 1,193 | — | (10 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
84,061 | (980) | (212 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (In millions of won) | December 31, 2023 | |||||||||||||||
| Original amount | Allowance for doubtful account | |||||||||||||||
| Trade accounts and notes receivable |
Other accounts receivable |
Trade accounts and notes receivable |
Other accounts receivable |
|||||||||||||
| Not past due |
123,919 | (932) | (191 | ) | ||||||||||||
| 1-15 days past due |
3,077 | 1,357 | (1 | ) | — | |||||||||||
| 16-30 days past due |
3,435 | 156 | — | (2 | ) | |||||||||||
| 31-60 days past due |
— | 168 | — | (2 | ) | |||||||||||
| More than 60 days past due |
— | 1,592 | — | (12 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
127,192 | (933) | (207 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
The movement in the allowance for doubtful account in respect of trade accounts and notes receivable and other accounts receivable for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | March 31, 2024 | March 31, 2023 | ||||||||||||||
| Trade accounts and notes receivable |
Other accounts receivable |
Trade accounts and notes receivable |
Other accounts receivable |
|||||||||||||
| At January 1 |
207 | 875 | 1,778 | |||||||||||||
| (Reversal of) bad debt expense |
47 | 5 | (103 | ) | (216 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| At March 31 |
212 | 772 | 1,562 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
13
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 5. | Trade Accounts and Notes Receivable, Other Accounts Receivable and Others, Continued |
(d) Other current assets as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Advanced payments |
1,675 | |||||||
| Prepaid expenses |
136,178 | 103,355 | ||||||
| Prepaid value added tax |
176,188 | 143,608 | ||||||
| Right to recover returned goods |
4,087 | 5,121 | ||||||
|
|
|
|
|
|||||
| Total |
253,759 | |||||||
|
|
|
|
|
|||||
14
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 6. | Other Financial Assets |
Other financial assets as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | December 31, 2023 | ||||||
| Current assets |
||||||||
| Financial assets at fair value through profit or loss |
||||||||
| Derivatives (*1) |
136,762 | |||||||
|
|
|
|
|
|||||
| Fair value hedging derivatives |
||||||||
| Derivatives (*2) |
— | |||||||
|
|
|
|
|
|||||
| Financial assets at amortized cost |
||||||||
| Deposits |
1,356 | |||||||
| Short-term loans |
28,961 | 26,375 | ||||||
|
|
|
|
|
|||||
| Subtotal |
27,731 | |||||||
|
|
|
|
|
|||||
| Other financial assets |
||||||||
| Lease receivables |
4,130 | |||||||
|
|
|
|
|
|||||
| Total |
168,623 | |||||||
|
|
|
|
|
|||||
| Non-current assets |
||||||||
| Financial assets at fair value through profit or loss |
||||||||
| Equity securities |
87,027 | |||||||
| Convertible securities |
3,185 | 3,127 | ||||||
| Derivatives (*1) |
39,536 | 32,941 | ||||||
|
|
|
|
|
|||||
| Subtotal |
123,095 | |||||||
|
|
|
|
|
|||||
| Fair value hedging derivatives |
||||||||
| Derivatives (*2) |
— | |||||||
|
|
|
|
|
|||||
| Financial assets at amortized cost |
||||||||
| Deposits |
17,022 | |||||||
| Long-term loans |
26,732 | 33,509 | ||||||
|
|
|
|
|
|||||
| Subtotal |
50,531 | |||||||
|
|
|
|
|
|||||
| Total |
173,626 | |||||||
|
|
|
|
|
|||||
| (*1) | The derivatives, which are not designated as hedging instruments, arise from cross currency interest swap contracts and others for the purpose of managing currency and interest rate risks associated with foreign currency denominated borrowings and bonds. |
| (*2) | The derivatives, which are designated as hedging instruments, arise from forward exchange contracts for the purpose of managing currency risk associated with advances received in foreign currency. |
15
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 7. | Inventories |
Inventories as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Finished goods |
750,775 | |||||||
|
Work-in-process |
1,462,450 | 1,145,606 | ||||||
| Raw materials |
568,979 | 457,356 | ||||||
| Supplies |
188,403 | 173,991 | ||||||
|
|
|
|
|
|||||
| Total |
2,527,728 | |||||||
|
|
|
|
|
|||||
For the three-month periods ended March 31, 2024 and 2023, the amount of inventories recognized as cost of sales and inventory valuation allowance are as follows:
| (In millions of won) | 2024 | 2023 | ||||||
| Inventories recognized as cost of sales |
4,794,490 | |||||||
| Inventory valuation allowance |
210,044 | 239,490 | ||||||
| Use of inventory valuation allowance |
(192,627 | ) | (245,619 | ) | ||||
There were no significant reversals of inventory valuation allowance recognized during the three-month periods ended March 31, 2024 and 2023.
16
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 8. | Investments in Associates |
Details of investment in associates as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||||||||||||||||||
| Associates |
Location | Closing | Date of incorporation |
Business |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||
| Percentage of ownership |
Carrying amount |
Percentage of ownership |
Carrying amount |
|||||||||||||||||||||
| Paju Electric Glass Co., Ltd. |
Paju, South Korea |
December | January 2005 |
Production of glass for display | 40 | % | 40 | % | ||||||||||||||||
| WooRee E&L Co., Ltd. |
Ansan, South Korea |
December | June 2008 |
Production of LED back light unit packages | 13 | % | 7,216 | 13 | % | 7,106 | ||||||||||||||
| YAS Co., Ltd. |
Paju, South Korea |
December | April 2002 |
Development and production of deposition equipment for OLEDs | 16 | % | 28,776 | 16 | % | 28,564 | ||||||||||||||
| AVATEC Co., Ltd. |
Daegu, South Korea |
December | August 2000 |
Processing and sales of glass for display | 14 | % | 20,750 | 14 | % | 20,871 | ||||||||||||||
| Arctic Sentinel, Inc. |
Los Angeles, U.S.A. |
March | June 2008 |
Development and production of tablet for kids |
10 | % | — | 10 | % | — | ||||||||||||||
| Cynora GmbH |
Bruchsal, Germany |
December | March 2003 |
Development organic light emitting materials for displays and lighting devices | 10 | % | — | 10 | % | — | ||||||||||||||
| Material Science Co., Ltd.(*) |
Seoul, South Korea |
December | January 2014 |
Development, production, and sales of materials for display | 15 | % | 3,255 | 16 | % | 3,588 | ||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total |
||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
17
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 8. | Investments in Associates, Continued |
| (*) | For the three-month period ended March 31, 2024, due to the investee’s disposal of treasury shares, the Parent Company’s percentage of ownership decreased from 16% to 15%. |
Although the Parent Company’s respective share interests in WooRee E&L Co., Ltd., YAS Co., Ltd., AVATEC Co., Ltd., Arctic Sentinel, Inc., Cynora GmbH and Material Science Co., Ltd. are below 20%, the Parent Company is able to exercise significant influence through its right to appoint one or more directors to the board of directors of each investee. Accordingly, the investments in these investees have been accounted for using the equity method.
Dividend income recognized from associates for the three-month periods ended March 31, 2024 and 2023 amounted to
W200 million and W15,200 million, respectively.
18
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 9. | Property, Plant and Equipment |
For the three-month periods ended March 31, 2024 and 2023, the Group purchased property, plant and equipment of
W473,408 million and W1,243,634 million, respectively. The capitalized borrowing costs and the annualized capitalization rates were W28,363 million and 5.70%, and
W76,413 million and 5.03%, for the three-month periods ended March 31, 2024 and 2023, respectively. Also, for the three-month periods ended March 31, 2024 and 2023, the Group disposed of property, plant and equipment
with carrying amounts of W44,171 million and W393,438 million, respectively. And, the Group recognized W5,629 million and W16,791 million, respectively, as gain
and loss on disposal of property, plant and equipment for the three-month period ended March 31, 2024 (gain and loss on disposal of property, plant and equipment for the three-month period ended March 31, 2023:
W15,523 million and W33,041 million, respectively). For the three-month periods ended March 31, 2024 and 2023, impairment losses of W69,618 million and
W3,890 million are recognized respectively for the difference between the carrying amount and the recoverable amount of property, plant and equipment.
| 10. | Intangible Assets |
The Group capitalizes expenditures related to development activities, such as expenditures incurred on designing, manufacturing and testing of
products after those related activities meet the capitalization criteria of development costs including technical feasibility, future economic benefits and others. The balances of capitalized development costs as of March 31, 2024 and
December 31, 2023 are W631,854 million and W641,461 million, respectively. For the three-month periods ended March 31, 2024 and 2023, the Group recognized impairment losses amounting to
W45,368 million and W1,962 million, respectively, in connection with development projects.
| 11. | Investment Property |
| (a) | Changes in investment properties for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| At January 1 |
28,269 | |||||||
| Depreciation |
(1,272 | ) | (1,226 | ) | ||||
|
|
|
|
|
|||||
| At March 31 |
27,043 | |||||||
|
|
|
|
|
|||||
| (b) | For the three-month period ended March 31, 2024, rental income from investment property is
|
19
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 12. | Financial Liabilities |
| (a) | Financial liabilities as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Current |
||||||||
| Short-term borrowings |
1,875,635 | |||||||
| Current portion of long-term borrowings |
3,194,920 | 2,934,693 | ||||||
| Current portion of bonds |
901,074 | 369,716 | ||||||
| Derivatives (*1) |
7,435 | 26,193 | ||||||
| Fair value hedging derivatives (*2) |
— | 7,392 | ||||||
| Lease liabilities |
47,034 | 48,666 | ||||||
|
|
|
|
|
|||||
| Total |
5,262,295 | |||||||
|
|
|
|
|
|||||
| Non-current |
||||||||
| Long-term borrowings |
10,230,658 | |||||||
| Bonds |
513,216 | 1,118,427 | ||||||
| Derivatives (*1) |
18,685 | 37,333 | ||||||
| Fair value hedging derivatives (*2) |
324 | 28,660 | ||||||
| Lease liabilities |
24,930 | 24,698 | ||||||
|
|
|
|
|
|||||
| Total |
11,439,776 | |||||||
|
|
|
|
|
|||||
| (*1) | The derivatives, which are not designated as hedging instruments, arise from cross currency interest swap contracts and others for the purpose of managing currency and interest rate risks associated with foreign currency denominated borrowings and bonds. |
| (*2) | The derivatives, which are designated as hedging instruments, arise from forward exchange contracts for the purpose of managing currency risk associated with advances received in foreign currency. |
| (b) | Details of short-term borrowings as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||
| Lender |
Description | Annual interest rate as of March 31, 2024 (%) |
March 31, 2024 |
December 31, 2023 | ||||
| Standard Chartered Bank Korea Limited and others |
Working capital and others | 3.40 ~ 6.98 | 1,875,635 | |||||
20
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 12. | Financial Liabilities, Continued |
| (c) | Details of Won denominated long-term borrowings as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||||||||||||||
| Lender |
Description | Maturity | Annual interest rate as of March 31, 2024 (%) |
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
| LG Electronics Inc. |
|
Operating capital |
|
March 2026 | 6.06 | 1,000,000 | ||||||||||||||
| Korea Development Bank and others |
|
Facility capital and others |
|
|
July 2024 ~ March 2030 |
|
1.90 ~ 6.65 | 3,763,753 | 3,490,967 | |||||||||||
| Less : current portion of long-term borrowings |
(1,183,500 | ) | (776,000 | ) | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total |
3,714,967 | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| (d) | Details of foreign currency denominated long-term borrowings as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won, USD and CNY) | ||||||||||||||||||||
| Lender |
Description | Maturity | Annual interest rate as of March 31, 2024 (%) |
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
| KEB Hana Bank and others |
|
Facility capital and others |
|
|
May 2024 ~ July 2029 |
|
1.82 ~ 8.60 | 8,674,384 | ||||||||||||
| Foreign currency equivalent of foreign currency borrowings |
USD 3,057 | USD 3,222 | ||||||||||||||||||
| CNY 26,757 | CNY 24,991 | |||||||||||||||||||
| Less : current portion of long-term borrowings |
(2,011,420 | ) | (2,158,693 | ) | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total |
6,515,691 | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
21
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 12. | Financial Liabilities, Continued |
| (e) | Details of bonds issued and outstanding as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won and USD) | ||||||||||||||||
| Maturity | Annual interest rate as of March 31, 2024 (%) |
March 31, 2024 |
December 31, 2023 |
|||||||||||||
| Won denominated bonds at amortized cost (*1) |
||||||||||||||||
| Publicly issued bonds |
|
September 2024 ~ February 2027 |
|
2.29~3.66 | 1,025,000 | |||||||||||
| Privately issued bonds |
|
January 2025 ~ January 2026 |
|
7.20~7.25 | 337,000 | 337,000 | ||||||||||
| Less : discount on bonds |
(1,753 | ) | (2,120 | ) | ||||||||||||
| Less : current portion |
(901,074 | ) | (369,716 | ) | ||||||||||||
|
|
|
|
|
|||||||||||||
| Subtotal |
990,164 | |||||||||||||||
|
|
|
|
|
|||||||||||||
| Foreign currency denominated bonds at amortized cost (*2) |
||||||||||||||||
| Privately issued bonds |
April 2026 | 7.22 | 128,940 | |||||||||||||
| Foreign currency equivalent |
USD 100 | USD 100 | ||||||||||||||
| Less : discount on bonds |
(637 | ) | (677 | ) | ||||||||||||
|
|
|
|
|
|||||||||||||
| Less : discount on bonds of Foreign currency denominated bonds |
— | USD (1) | ||||||||||||||
|
|
|
|
|
|||||||||||||
| Subtotal |
128,263 | |||||||||||||||
|
|
|
|
|
|||||||||||||
| Total |
1,118,427 | |||||||||||||||
|
|
|
|
|
|||||||||||||
| (*1) | Principal of the won denominated bonds is to be repaid at maturity and interests are paid quarterly. |
| (*2) | Principal of the foreign currency denominated bonds is to be repaid at maturity and interests are paid quarterly. |
22
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 13. | Post-employment Benefits |
The Parent Company and certain subsidiaries’ defined benefit plans provide a lump-sum payment to an employee based on final salary rates and length of service at the time the employee leaves the Parent Company or certain subsidiaries.
| (a) | Net defined benefit liabilities (defined benefit assets) recognized as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Present value of defined benefit obligations |
1,491,146 | |||||||
| Fair value of plan assets |
(1,827,320 | ) | (1,897,025 | ) | ||||
|
|
|
|
|
|||||
| Total |
(405,879 | ) | ||||||
|
|
|
|
|
|||||
| Defined benefit liabilities, net |
1,559 | |||||||
| Defined benefit assets, net |
(407,438 | ) | ||||||
| (b) | Plan assets as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Time deposits in banks |
1,897,025 | |||||||
As of March 31, 2024, the Group maintains the plan assets primarily with Shinhan Bank, KEB Hana Bank and others.
| (c) | Expenses related to defined benefit plans recognized in profit or loss for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Current service cost |
43,484 | |||||||
| Net interest cost |
(4,714) | (5,986) | ||||||
|
|
|
|
|
|||||
| Total |
37,498 | |||||||
|
|
|
|
|
|||||
| (d) | Remeasurements of the net defined benefit liabilities (assets) included in other comprehensive income (loss) for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Remeasurements of net defined benefit liabilities |
(702 | ) | ||||||
| Tax effect |
831 | 157 | ||||||
|
|
|
|
|
|||||
| Remeasurements of net defined benefit liabilities, net of income tax |
(545 | ) | ||||||
|
|
|
|
|
|||||
23
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 14. | Provisions |
Changes in provisions for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||||||||||
| Litigation | Warranties (*) | Others | Total | |||||||||||||
| At January 1, 2024 |
173,795 | 5,880 | 181,481 | |||||||||||||
| Additions (reversal) |
64 | 8,918 | (1,495 | ) | 7,487 | |||||||||||
| Usage |
— | (36,196 | ) | — | (36,196 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| At March 31, 2024 |
146,517 | 4,385 | 152,772 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Current |
90,495 | 4,385 | 96,750 | |||||||||||||
| Non-current |
56,022 | — | 56,022 | |||||||||||||
| (*) | The Group provides warranty on defective products for warranty periods after sales. The provision is calculated based on the assumption of expected number of warranty claims and costs per claim considering historical experience. |
| (In millions of won) | ||||||||||||||||
| Litigation | Warranties (*) | Others | Total | |||||||||||||
| At January 1, 2023 |
249,368 | 8,431 | 259,479 | |||||||||||||
| Additions (reversal) |
96 | 18,582 | (1,879 | ) | 16,799 | |||||||||||
| Usage |
— | (44,512 | ) | — | (44,512 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| At March 31, 2023 |
223,438 | 6,552 | 231,766 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Current |
147,117 | 6,552 | 155,445 | |||||||||||||
| Non-current |
76,321 | — | 76,321 | |||||||||||||
| (*) | The Group provides warranty on defective products for warranty periods after sales. The provision is calculated based on the assumption of expected number of warranty claims and costs per claim considering historical experience. |
24
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 15. | Contingent Liabilities and Commitments |
| (a) | Legal Proceedings |
Anti-trust litigations
The Group and other LCD panel manufacturers have been sued by individual claimants on allegations of violating EU competition laws. While the Group continues its vigorous defense of the various pending proceedings described above, as of March 31, 2024, the Group cannot predict the final outcomes of the lawsuits that have been filed.
Others
The Group is involved in various lawsuits and disputes in addition to pending proceedings described above. The Group cannot reliably estimate the timing and amount of outflows of resources embodying economic benefits relating to the disputes.
| (b) | Commitments |
Factoring and securitization of accounts receivable
The Parent Company has discount agreements with Korea Development Bank and other banks for accounts receivable related to export sales
transactions with its subsidiary, up to USD 1,000 million (W 1,346,800 million). As of March 31, 2024, there is no discounted accounts receivable that are not past due in connection with these agreements. In relation to
the above contract, the financial institutions have the recourse for account receivables that are past due.
The Parent Company has
assignment agreements with Standard Chartered Bank and other banks for accounts receivable related to domestic and export sales transactions, up to W4,154,878 million. As of March 31, 2024, the amount of the sold accounts
receivable that are not past due in connection with these agreements is W696,770 million. In relation to the above contract, the financial institutions do not have the recourse for account receivables that are past due.
25
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 15. | Contingent Liabilities and Commitments, Continued |
Letters of credit
The Group has entered into agreements with a financial institutions to open letter of credit (L/C), etc., and as of March 31, 2024, the credit limits for each agreement are as follows:
| (In millions of won and USD) | ||||||||
| Contractual amount | KRW equivalent | |||||||
| KEB Hana Bank |
USD 450 | |||||||
| Industrial Bank of Korea |
USD 450 | 606,060 | ||||||
| Industrial and Commercial Bank of China |
USD 200 | 269,360 | ||||||
| Shinhan Bank |
USD 70 | 94,276 | ||||||
| KB Kookmin Bank |
USD 700 | 942,760 | ||||||
| MUFG Bank |
USD 100 | 134,680 | ||||||
| The Export–Import Bank of Korea |
USD 100 | 134,680 | ||||||
|
|
|
|
|
|||||
| Total |
USD 2,070 | 2,787,876 | ||||||
Payment guarantees
The Parent Company obtained payment guarantees amounting of USD 1,200 million (W1,616,160 million) from KB Kookmin Bank
and other banks for advances received related to the long-term supply agreements.
LG Display (China) Co., Ltd. and other subsidiaries have
entered into agreements with China Construction Bank Corporation and other banks to receive guarantees up to CNY 850 million (W157,888 million), JPY 900 million (W8,005 million), VND 73,279 million
(W3,979 million), and USD 0.5 million (W698 million) for the payment of consumption tax, import value-added tax, customs duties, and electricity charges.
Patent and License agreements
As of March 31, 2024, the Group has patent license agreements with Hitachi Display, Ltd. and others in relation to its LCD business and patent license agreements with Universal Display Corporation and others in relation to its OLED business. Also, as of March 31, 2024, the Group has a trademark license agreement with LG Corp. and other license agreements with other companies for patents, trademarks and other intellectual property rights.
26
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 15. | Contingent Liabilities and Commitments, Continued |
Long-term Supply Agreement
As of March 31, 2024, in connection with long-term supply agreements with customers, the Parent Company recognized advances received of
USD 1,200 million (W1,616,160 million). The advances received will be used to offset against accounts receivable arising from future product sales after a certain period of time from the date of receipt. In relation to this,
the Parent Company received payment guarantees of USD 1,200 million (W1,616,160 million) from KB Kookmin Bank and other banks. (see note 15(b) payment guarantees).
Collateral
The details of collateral provided by the Group are as follows:
| (In millions of won, USD and CNY) | ||||||||||||||
| Collateral |
Carrying amount |
Maximum bond amount |
Secured creditor |
Collateral borrowings amount |
||||||||||
| 1,200,000 | LG Electronics Inc. | 1,000,000 | ||||||||||||
| 82,354 | 326,400 | Korea Development Bank and others | 204,000 | |||||||||||
| Property, plant and equipment and others |
255,655 | (*) | 780,000 | Korea Development Bank and others | 300,000 | |||||||||
| 719,927 | — | China Construction Bank Corporation and others | CNY 9,330 | |||||||||||
| USD 200 | ||||||||||||||
| Deposits in Banks and others |
CNY 4,306 | 799,840 | Shinhan Bank and others | 450,000 | ||||||||||
The carrying amount of collateral asset, amounting to W255,655 million, includes
collateral asset of W82,354 million for collateral borrowings of W204,000 million from Korea Development Bank and other banks.
Commitments for asset acquisition
The amount committed to acquire property, plant, equipment and intangible assets not recognized on the financial statements as of
March 31, 2024 is W794,336 million.
27
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 16. | Share Capital, Share Premium and Reserves |
| (a) | Share capital and Share premium |
The total number of shares to be issued by the Parent Company is 500,000,000 shares, the number of shares issued is 500,000,000 shares
(December 31, 2023 : 357,815,700 shares), and the par value per share is W5,000.
The Parent Company conducted a paid-in capital increase based on the resolution of the board of directors on December 18, 2023, and the newly issued shares were listed on the Korea Exchange (KRX) on March 26, 2024.
With the new shares of common stock, the capital stock increased by W710,921 million to
W2,500,000 million.
| Classification |
Description | |
| Purpose |
Facility capital, operating capital and debt repayment | |
| Type of shares issued |
Common stock | |
| Number of shares issued |
142,184,300 shares | |
| The amount per shares |
|
The Group’s capital surplus consists of share premium and due to the capital increase during this
quarter, the share premium increased by W569,893 million to W2,821,006 million.
| (b) | Reserves |
Reserves consist mainly of the following:
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of overseas subsidiaries and others.
Other comprehensive income (loss) from associates
The other comprehensive income (loss) from associates comprises the amount related to change in equity of investments in equity accounted investees.
Reserves as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Foreign currency translation differences for overseas subsidiaries and others |
548,792 | |||||||
| Other comprehensive loss from associates |
(33,120 | ) | (32,816 | ) | ||||
|
|
|
|
|
|||||
| Total |
515,976 | |||||||
|
|
|
|
|
|||||
28
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 17. | Revenue |
Details of revenue for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Sales of goods |
4,398,318 | |||||||
| Royalties |
3,582 | 4,947 | ||||||
| Others |
14,457 | 7,791 | ||||||
|
|
|
|
|
|||||
| Total |
4,411,056 | |||||||
|
|
|
|
|
|||||
| 18. | Geographic and Other Information |
The following is a summary of the Group’s operation by region based on the location of customers for the three-month periods ended March 31, 2024 and 2023.
| (a) | Revenue by geography |
| (In millions of won) | ||||||||
| Region |
2024 | 2023 | ||||||
| Domestic |
132,363 | |||||||
| Foreign |
||||||||
| China |
3,563,714 | 2,965,198 | ||||||
| Asia (excluding China) |
608,063 | 528,673 | ||||||
| North America |
476,950 | 446,098 | ||||||
| Europe |
350,043 | 338,724 | ||||||
|
|
|
|
|
|||||
| Subtotal |
4,278,693 | |||||||
|
|
|
|
|
|||||
| Total |
4,411,056 | |||||||
|
|
|
|
|
|||||
Revenue to Company A and Company B amount to W 2,647,814 million and W
735,119 million, respectively, for the three-month period ended March 31, 2024 (the three-month period ended March 31, 2023: W 2,277,666 million and W 825,557 million, respectively). The
Group’s top ten end-brand customers together accounted for 88% of revenue for the three-month period ended March 31, 2024 (the three-month period ended March 31, 2023: 88%).
29
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 18. | Geographic and Other Information, Continued |
| (b) | Non-current assets by geography |
| (In millions of won) | ||||||||||||||||||||||||
| Region |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
| Property, plant and equipment |
Intangible assets |
Investment Property |
Property, plant and equipment |
Intangible assets |
Investment Property |
|||||||||||||||||||
| Domestic |
1,632,421 | 31,723 | 13,583,136 | 1,683,116 | 32,995 | |||||||||||||||||||
| Foreign |
||||||||||||||||||||||||
| China |
3,215,852 | 28,152 | — | 3,358,395 | 32,009 | — | ||||||||||||||||||
| Vietnam |
3,277,228 | 34,683 | — | 3,244,729 | 31,472 | — | ||||||||||||||||||
| Others |
13,108 | 24,790 | — | 14,072 | 27,358 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
87,625 | — | 6,617,196 | 90,839 | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
1,720,046 | 31,723 | 20,200,332 | 1,773,955 | 32,995 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (c) | Revenue by product and services |
| (In millions of won) | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| TV |
825,117 | |||||||
| IT |
2,127,639 | 1,694,890 | ||||||
| AUTO |
513,486 | 495,042 | ||||||
| Mobile and others (*) |
1,487,058 | 1,396,007 | ||||||
|
|
|
|
|
|||||
| Total |
4,411,056 | |||||||
|
|
|
|
|
|||||
| (*) | This includes royalties and other revenue. |
The proportion of revenue from OLED products to total revenue disclosed above was 47% and 45% for the years ended December 31, 2024 and 2023, respectively.
30
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 19. | The Nature of Expenses |
The classification of expenses by nature for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Changes in inventories |
62,332 | |||||||
| Purchases of raw materials and others |
3,126,663 | 2,384,765 | ||||||
| Depreciation and amortization |
1,279,177 | 1,018,196 | ||||||
| Outsourcing |
263,732 | 196,348 | ||||||
| Labor |
890,511 | 863,359 | ||||||
| Supplies and others |
220,564 | 216,886 | ||||||
| Utility |
329,867 | 284,188 | ||||||
| Fees and commissions |
167,603 | 178,146 | ||||||
| Shipping |
35,937 | 29,920 | ||||||
| Advertising |
14,287 | 17,672 | ||||||
| Warranty |
8,918 | 18,582 | ||||||
| Travel |
15,579 | 13,779 | ||||||
| Taxes and dues |
36,531 | 31,047 | ||||||
| Others |
316,704 | 233,666 | ||||||
|
|
|
|
|
|||||
| Total |
5,548,886 | |||||||
|
|
|
|
|
|||||
Total expenses consist of cost of sales, selling, administrative, research and development expenses and other non-operating expenses, excluding foreign exchange differences.
31
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 20. | Selling and Administrative Expenses |
Details of selling and administrative expenses for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Salaries |
94,046 | |||||||
| Expenses related to defined benefit plans |
5,786 | 6,265 | ||||||
| Other employee benefits |
21,599 | 22,414 | ||||||
| Shipping |
22,763 | 20,960 | ||||||
| Fees and commissions |
59,573 | 63,886 | ||||||
| Depreciation |
67,680 | 65,566 | ||||||
| Taxes and dues |
17,362 | 14,873 | ||||||
| Advertising |
14,287 | 17,672 | ||||||
| Warranty |
8,918 | 18,582 | ||||||
| Insurance |
3,356 | 3,601 | ||||||
| Travel |
4,072 | 4,982 | ||||||
| Training |
3,973 | 3,883 | ||||||
| Others |
25,539 | 25,289 | ||||||
|
|
|
|
|
|||||
| Total |
362,019 | |||||||
|
|
|
|
|
|||||
32
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 21. | Other Non-operating Income and Other Non-operating Expenses |
| (a) | Details of other non-operating income for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Foreign currency gain |
365,677 | |||||||
| Gain on disposal of property, plant and equipment |
5,629 | 15,523 | ||||||
| Reversal of impairment loss on property, plant and equipment |
— | 7 | ||||||
| Reversal of impairment loss on intangible assets |
— | 122 | ||||||
| Rental income |
504 | 563 | ||||||
| Others |
13,685 | 1,458 | ||||||
|
|
|
|
|
|||||
| Total |
383,350 | |||||||
|
|
|
|
|
|||||
| (b) | Details of other non-operating expenses for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Foreign currency loss |
566,246 | |||||||
| Loss on disposal of property, plant and equipment |
16,791 | 33,041 | ||||||
| Impairment loss on property, plant and equipment |
69,618 | 3,890 | ||||||
| Loss on disposal of intangible assets |
193 | 4 | ||||||
| Impairment loss on intangible assets |
49,996 | 2,429 | ||||||
| Others |
5,469 | 108 | ||||||
|
|
|
|
|
|||||
| Total |
605,718 | |||||||
|
|
|
|
|
|||||
33
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 22. | Finance Income and Finance Costs |
Finance income and costs recognized in profit or loss for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Finance income |
||||||||
| Interest income |
25,993 | |||||||
| Foreign currency gain |
35,939 | 187,583 | ||||||
| Gain on transaction of derivatives |
85,172 | 28,925 | ||||||
| Gain on valuation of derivatives |
59,784 | 272,024 | ||||||
| Gain on disposal of financial assets at fair value through profit or loss |
— | 10 | ||||||
|
|
|
|
|
|||||
| Total |
514,535 | |||||||
|
|
|
|
|
|||||
| Finance costs |
||||||||
| Interest expense |
143,291 | |||||||
| Foreign currency loss |
174,150 | 287,381 | ||||||
| Loss on sale of trade accounts and notes receivable |
11,862 | 12,261 | ||||||
| Loss on valuation of derivatives |
707 | 217,126 | ||||||
| Loss on disposal of financial assets at fair value through profit or loss |
10 | — | ||||||
| Loss on valuation of financial assets at fair value through profit or loss |
— | 7,776 | ||||||
| Others |
2,593 | 246 | ||||||
|
|
|
|
|
|||||
| Total |
668,081 | |||||||
|
|
|
|
|
|||||
34
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 23. | Income Tax Benefit |
| (a) | Details of income tax benefit for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||
| 2024 | 2023 | |||
| Current tax expense | 84,364 | |||
| Deferred tax benefit |
(265,082) | (406,103) | ||
|
|
| |||
| Income tax benefit |
(321,739) | |||
|
|
|
| (b) | Deferred tax assets and liabilities |
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that the deferred tax assets at the reporting date will be realized with the Group’s estimated future taxable income. The Group’s deferred tax assets and liabilities may differ from actual refundable or payable amount.
Deferred tax assets and liabilities as of March 31, 2024 and December 31, 2023 are attributable to the following:
| (In millions of won) | Assets | Liabilities | Total | |||||||||||||||||||||
| March, 31, 2024 |
December, 31, 2023 |
March, 31, 2024 |
December, 31, 2023 |
March, 31, 2024 |
December, 31, 2023 |
|||||||||||||||||||
| Other accounts receivable, net |
— | (73 | ) | (61 | ) | (73 | ) | (61 | ) | |||||||||||||||
| Inventories, net |
58,527 | 51,728 | — | — | 58,527 | 51,728 | ||||||||||||||||||
| Defined benefit liabilities, net |
507 | — | (69,929 | ) | (89,753 | ) | (69,422 | ) | (89,753 | ) | ||||||||||||||
| Investments in subsidiaries and associates |
89,033 | — | (155,813 | ) | (89,649 | ) | (66,780 | ) | (89,649 | ) | ||||||||||||||
| Accrued expenses |
74,092 | 97,867 | — | — | 74,092 | 97,867 | ||||||||||||||||||
| Property, plant and equipment |
561,712 | 609,345 | (47,370 | ) | (43,282 | ) | 514,342 | 566,063 | ||||||||||||||||
| Intangible assets |
34,163 | 13,314 | (1,646 | ) | (2,069 | ) | 32,517 | 11,245 | ||||||||||||||||
| Provisions |
33,357 | 39,586 | — | — | 33,357 | 39,586 | ||||||||||||||||||
| Other temporary differences |
69,407 | 70,182 | (11,436 | ) | (11,451 | ) | 57,971 | 58,731 | ||||||||||||||||
| Tax losses carryforwards |
3,040,947 | 2,766,820 | — | — | 3,040,947 | 2,766,820 | ||||||||||||||||||
| Tax credit carryforwards |
142,183 | 148,215 | — | — | 142,183 | 148,215 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Deferred tax assets (liabilities) |
3,797,057 | (286,267 | ) | (236,265 | ) | 3,817,661 | 3,560,792 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (c) | Global Minimum Tax |
Under Pillar Two legislation, the Group is liable to pay a top-up tax for the difference between the GloBE effective tax rate per jurisdiction and the 15% minimum rate. The Group has assessed its impact of the Pillar Two legislation on its financial statements. As a result of the assessment, the Group has no current tax expenses related to Pillar Two legislation for the three-month period ended March 31, 2024.
35
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Loss Per Share |
| (a) | Basic loss per share for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In won and No. of shares) | ||||||||
| 2024 | 2023 | |||||||
| Loss for the period |
(1,213,777,498,100 | ) | ||||||
| Weighted-average number of common shares outstanding |
384,377,602 | 380,884,673 | ||||||
|
|
|
|
|
|||||
| Basic loss per share |
(3,187 | ) | ||||||
|
|
|
|
|
|||||
Due to paid-in capital increase during the current quarter, the number of outstanding shares has increased. The weighted-average number of common shares outstanding for previous period has been adjusted considering a bonus element in a rights issue to existing shareholders during the current quarter.
| (b) | Diluted loss per share |
The Group has no potential dilutive ordinary shares, and accordingly, basic loss per share is identical to diluted loss per share.
36
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management |
The Group is exposed to credit risk, liquidity risk and market risk. The Group identifies and analyzes such risks, and controls are implemented under a risk management system to monitor and manage these risks at below an acceptable level.
| (a) | Market risk |
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
| (i) | Currency risk |
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Parent Company, Korean won (KRW). The currencies in which these transactions primarily are denominated are USD, CNY, JPY, etc.
Interest on borrowings is accrued in the currency of the borrowing. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group, primarily KRW, USD and CNY.
The Group adopts policies to ensure that its net exposure is kept to a manageable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances. In respect of monetary assets and liabilities denominated in foreign currencies, the Group manages currency risk through continuously managing the position of foreign currencies, measuring the currency risk and, if necessary, using derivatives such as currency forwards, currency swap and others.
37
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| i) | Exposure to currency risk |
The Group’s exposure to primarily foreign currency risk based on notional amounts as of March 31, 2024 is as follows:
| (In millions) | March 31, 2024 | |||||||||||
| Foreign currency asset | Foreign currency liability | Net exposure | ||||||||||
| USD |
3,385 | (4,252 | ) | (867 | ) | |||||||
| JPY |
929 | (18,430 | ) | (17,501 | ) | |||||||
| CNY |
8,609 | (30,753 | ) | (22,144 | ) | |||||||
| VND |
756,079 | (1,439,453 | ) | (683,374 | ) | |||||||
Foreign currency assets and liabilities include derivatives assets and liabilities from cross currency interest rate swap contracts and forward exchange contracts.
Cross currency interest rate swap contracts, USD 800 million and CNY 345 million were entered into to manage currency risk with respect to foreign currency denominated borrowings and USD 1,293 million were entered into to manage currency risk and interest rate risk with respect to foreign currency denominated borrowings and bonds.
Forward exchange contracts, USD 1,200 million were entered into to manage currency risk with respect to advances received in foreign currency.
The Group’s exposure to primarily foreign currency risk based on notional amounts as of December 31, 2023 is as follows:
| (In millions) | December 31, 2023 | |||||||||||
| Foreign currency asset | Foreign currency liability | Net exposure | ||||||||||
| USD |
3,545 | (4,404 | ) | (859 | ) | |||||||
| JPY |
1,028 | (24,426 | ) | (23,398 | ) | |||||||
| CNY |
9,864 | (28,907 | ) | (19,043 | ) | |||||||
| VND |
253,457 | (2,049,792 | ) | (1,796,335 | ) | |||||||
Foreign currency assets and liabilities include derivatives assets and liabilities from cross currency interest rate swap contracts and forward exchange contracts.
Cross currency interest rate swap contracts, USD 500 million and CNY 345 million were entered into to manage currency risk with respect to foreign currency denominated borrowings and USD 1,430 million were entered into to manage currency risk and interest rate risk with respect to foreign currency denominated borrowings and bonds.
Forward exchange contracts, USD 1,200 million were entered into to manage currency risk with respect to advances received in foreign currency.
38
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| i) | Exposure to currency risk, Continued |
Average exchange rates applied for the three-month periods ended March 31, 2024 and 2023 and the exchange rates at March 31, 2024 and December 31, 2023 are as follows:
| (In won) | Average rate | Reporting date spot rate | ||||||||||||||
| 2024 | 2023 | March 31, 2024 | December 31, 2023 | |||||||||||||
| USD |
1,274.41 | 1,346.80 | 1,289.40 | |||||||||||||
| JPY |
8.96 | 9.64 | 8.89 | 9.13 | ||||||||||||
| CNY |
184.53 | 186.03 | 185.75 | 180.84 | ||||||||||||
| VND |
0.0541 | 0.0541 | 0.0543 | 0.0532 | ||||||||||||
39
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| ii) | Sensitivity analysis |
A weaker won, as indicated below, against the following currencies which comprise the Group’s assets or liabilities denominated in a foreign currency as of March 31, 2024 and December 31, 2023, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considers to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, would remain constant. The changes in equity and profit or loss would have been as follows:
| (In millions of won) | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Equity | Profit or loss | Equity | Profit or loss | |||||||||||||
| USD (5 percent weakening) |
42,675 | (68,615 | ) | 44,361 | ||||||||||||
| JPY (5 percent weakening) |
(5,972 | ) | (6,091 | ) | (8,160 | ) | (8,480 | ) | ||||||||
| CNY (5 percent weakening) |
(205,655 | ) | (2 | ) | (172,198 | ) | (2 | ) | ||||||||
| VND (5 percent weakening) |
(1,430 | ) | (1,430 | ) | (3,683 | ) | (3,683 | ) | ||||||||
A stronger won against the above currencies as of March 31, 2024 and December 31, 2023 would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
| iii) | Fair value hedging derivatives |
In relation to advances received that are denominated in foreign currency, the Parent Company uses derivative instruments to hedge change of
fair value due to foreign currency exchange rate changes. As of March 31, 2024, there is no ineffective portion of the gain or loss on valuation of derivatives to which change of fair value hedging accounting has been applied and gain on
valuation amounting to W71,125 million, respectively, (contracted buying amount: USD 1,200 million, contracted exchange rate: W1,289.11 ~ 1,310.08) are recognized in profit or loss.
| (ii) | Interest rate risk |
Interest rate risk arises principally from the Group’s variable interest-bearing bonds and borrowings. The Group establishes and applies
its policy to reduce uncertainty arising from fluctuations in interest rates and to minimize finance cost and manages interest rate risk by monitoring of trends of fluctuations in interest rate and establishing plan for countermeasures. Meanwhile,
the Group entered into cross currency interest rate swap contracts amounting to USD 1,293 million (W1,740,739 million) and interest rate swap contracts amounting to W970,000 million in notional amount to
manage interest rate risk with respect to variable interest bearing borrowings.
40
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| i) | Profile |
The interest rate profile of the Group’s interest-bearing financial instruments as of March 31, 2024 and December 31, 2023 is as follows:
| (In millions of won) | ||||||||
| March 31, 2024 |
December 31, 2023 |
|||||||
| Fixed rate instruments |
||||||||
| Financial assets |
3,163,490 | |||||||
| Financial liabilities |
(5,940,399 | ) | (6,333,238 | ) | ||||
|
|
|
|
|
|||||
| Total |
(3,169,748 | ) | ||||||
|
|
|
|
|
|||||
| Variable rate instruments |
||||||||
| Financial liabilities |
(10,195,891 | ) | ||||||
| ii) | Equity and profit or loss sensitivity analysis for variable rate instruments |
As of March 31, 2024 and December 31, 2023, a change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below for the respective following 12 month periods. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
| (In millions of won) | Equity | Profit or loss | ||||||||||||||
| 1%p increase |
1%p decrease |
1%p increase |
1%p decrease |
|||||||||||||
| March 31, 2024 |
||||||||||||||||
| Variable rate instruments (*) |
85,434 | (85,434 | ) | 85,434 | ||||||||||||
| December 31, 2023 |
||||||||||||||||
| Variable rate instruments (*) |
78,590 | (78,590 | ) | 78,590 | ||||||||||||
| (*) | Financial instruments related to non-hedging interest rate swap are included in the calculation. |
41
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| (b) | Credit risk |
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.
The Group’s exposure to credit risk of trade and other receivables is influenced mainly by the individual characteristics of each customer. However, management believes that the default risk of the country in which each customer operates, do not have a significant influence on credit risk since the majority of the customers are global electronic appliance manufacturers operating in global markets.
The Group establishes credit limits for each customer and each new customer is analyzed quantitatively and qualitatively before determining whether to utilize third party guarantees, insurance or factoring as appropriate.
In relation to the impairment of financial assets subsequent to initial recognition, the Group recognizes the changes in expected credit loss (“ECL”) in profit or loss at each reporting date.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Financial assets at amortized cost |
||||||||
| Cash equivalents |
2,257,519 | |||||||
| Deposits in banks |
653,259 | 905,982 | ||||||
| Trade accounts and notes receivable, net |
2,944,680 | 3,218,093 | ||||||
| Non-trade receivables |
72,012 | 112,739 | ||||||
| Accrued income |
11,837 | 14,246 | ||||||
| Deposits |
18,514 | 18,378 | ||||||
| Loans |
55,693 | 59,884 | ||||||
|
|
|
|
|
|||||
| Subtotal |
6,327,721 | 6,586,841 | ||||||
|
|
|
|
|
|||||
| Other financial assets |
||||||||
| Lease receivables |
4,130 | |||||||
|
|
|
|
|
|||||
| Subtotal |
2,434 | 4,130 | ||||||
|
|
|
|
|
|||||
| Financial assets at fair value through profit or loss |
||||||||
| Convertible securities |
3,127 | |||||||
| Derivatives |
191,374 | 169,703 | ||||||
|
|
|
|
|
|||||
| Subtotal |
172,830 | |||||||
|
|
|
|
|
|||||
| Financial assets effective for fair value hedging |
||||||||
| Derivatives |
— | |||||||
|
|
|
|
|
|||||
| Subtotal |
35,398 | — | ||||||
|
|
|
|
|
|||||
| Total |
6,763,801 | |||||||
|
|
|
|
|
|||||
Trade accounts and notes receivable are insured in order for the Group to manage credit risk if they do not meet the Group’s internal credit ratings. Uninsured trade accounts and notes receivable are managed by continuous monitoring of internal credit rating standards established by the Group and seeking insurance coverage, if necessary.
42
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| (c) | Liquidity risk |
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group has historically been able to satisfy its cash requirements from cash flows from operations and debt and equity financing. To the extent that the Group does not generate sufficient cash flows from operations to meet its capital requirements, the Group may rely on other financing activities, such as long-term borrowings and offerings of debt instruments, equity-linked and other debt instruments. In addition, the Group maintains a line of credit with various banks.
The following are the contractual maturities of financial liabilities, including estimated interest payments, as of March 31, 2024.
| (In millions of won) | Contractual cash flows in | |||||||||||||||||||||||||||
| Carrying amount |
Total | 6 months or less |
6-12 months |
1-2 years | 2-5 years | More than 5 years |
||||||||||||||||||||||
| Non-derivative financial liabilities |
||||||||||||||||||||||||||||
| Borrowings |
17,122,784 | 2,930,311 | 2,814,706 | 6,891,759 | 4,264,138 | 221,870 | ||||||||||||||||||||||
| Bonds |
1,414,290 | 1,508,377 | 320,835 | 639,511 | 68,419 | 479,612 | — | |||||||||||||||||||||
| Trade accounts and notes payable |
4,432,283 | 4,432,283 | 4,297,756 | 134,527 | — | — | — | |||||||||||||||||||||
| Other accounts payable |
1,541,148 | 1,543,710 | 1,453,979 | 89,731 | — | — | — | |||||||||||||||||||||
| Other accounts payable (enterprise procurement cards)(*) |
370,497 | 370,497 | 370,497 | — | — | — | — | |||||||||||||||||||||
| Long-term other accounts payable |
352,837 | 406,236 | — | — | 116,674 | 176,431 | 113,131 | |||||||||||||||||||||
| Security deposits received |
153,835 | 188,736 | 2,860 | 1,432 | 2,883 | 181,561 | — | |||||||||||||||||||||
| Lease liabilities |
71,964 | 75,762 | 32,273 | 17,448 | 12,663 | 11,194 | 2,184 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Derivative financial liabilities |
||||||||||||||||||||||||||||
| Derivatives |
(1,666 | ) | 4,562 | 2,216 | (211 | ) | (8,233 | ) | — | |||||||||||||||||||
| Fair value hedging derivatives |
324 | — | — | 324 | — | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
25,647,043 | 9,413,073 | 3,699,571 | 7,092,511 | 5,104,703 | 337,185 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
43
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| (*) | Represents liabilities payable to credit card companies for utility expenses and others paid using enterprise procurement cards. The Group presented the payable to credit card companies as other accounts payable and disclosed related cash flows as operating activities since the Group is using the enterprise procurement cards through agreements with suppliers for transactions arising from purchasing of goods and services, the payment term is within a year from the purchase, as part of the normal operating cycle, and no collateral is provided. |
Change in liabilities related to procurement cards for the three-month period ended March 31, 2024 is as follows:
| (In millions of won) | ||||||||||||
| January 1, 2024 | Change (Cash flows from operating activities) |
March 31, 2024 | ||||||||||
| Other accounts payable (enterprise procurement cards) |
(721,683 | ) | 370,497 | |||||||||
The following are the contractual maturities of financial liabilities, including estimated interest payments, as of December 31, 2023.
| (In millions of won) | Contractual cash flows in | |||||||||||||||||||||||||||
| Carrying amount |
Total | 6 months or less |
6-12 months |
1-2 years | 2-5 years | More than 5 years |
||||||||||||||||||||||
| Non-derivative financial liabilities |
||||||||||||||||||||||||||||
| Borrowings |
16,309,036 | 3,534,173 | 1,900,982 | 6,231,118 | 4,397,095 | 245,668 | ||||||||||||||||||||||
| Bonds |
1,488,143 | 1,597,741 | 111,169 | 319,011 | 642,996 | 524,565 | — | |||||||||||||||||||||
| Trade accounts and notes payable |
4,175,064 | 4,175,064 | 3,969,497 | 205,567 | — | — | — | |||||||||||||||||||||
| Other accounts payable |
1,826,723 | 1,829,539 | 1,750,080 | 79,459 | — | — | — | |||||||||||||||||||||
| Other accounts payable (enterprise procurement cards) (*) |
1,092,180 | 1,092,180 | 938,899 | 153,281 | — | — | — | |||||||||||||||||||||
| Long-term other accounts payable |
357,907 | 413,255 | — | — | 129,587 | 175,358 | 108,310 | |||||||||||||||||||||
| Security deposits received |
153,370 | 190,329 | 3,120 | 4,597 | 1,047 | 181,565 | — | |||||||||||||||||||||
| Lease liabilities |
73,364 | 77,246 | 29,980 | 21,335 | 11,848 | 11,461 | 2,622 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Derivative financial liabilities |
||||||||||||||||||||||||||||
| Derivatives |
45,705 | 18,781 | 3,988 | 12,474 | 10,462 | — | ||||||||||||||||||||||
| Fair value hedging derivatives |
36,052 | 36,052 | 1,514 | 5,878 | 20,282 | 8,378 | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
25,766,147 | 10,357,213 | 2,694,098 | 7,049,352 | 5,308,884 | 356,600 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
44
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| (*) | Represents liabilities payable to credit card companies for purchase of raw material and others paid using enterprise procurement cards. The Group presented the payable to credit card companies as other accounts payable and disclosed related cash flows as operating activities since the Group is using the enterprise procurement cards through agreements with suppliers for transactions arising from purchasing of goods and services, the payment term is within a year from the purchase, as part of the normal operating cycle, and no collateral is provided. |
Change in liabilities related to procurement cards for the year ended December 31, 2023 is as follows:
| (In millions of won) | ||||||||||||
| January 1, 2023 | Change (Cash flows from operation activities) |
December 31, 2023 | ||||||||||
| Other accounts payable (enterprise procurement cards) |
156,441 | 1,092,180 | ||||||||||
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
| (d) | Capital management |
Management’s policy is to maintain a capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Liabilities to equity ratio, net borrowings to equity ratio and other financial ratios are used by management to achieve an optimal capital structure. Management also monitors the return on capital as well as the level of dividends to ordinary shareholders.
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Total liabilities |
26,988,754 | |||||||
| Total equity |
9,540,423 | 8,770,544 | ||||||
| Cash and deposits in banks (*1) |
3,224,977 | 3,163,493 | ||||||
| Borrowings (including bonds) |
17,024,199 | 16,529,129 | ||||||
| Total liabilities to equity ratio |
279 | % | 308 | % | ||||
| Net borrowings to equity ratio (*2) |
145 | % | 152 | % | ||||
| (*1) | Cash and deposits in banks consist of cash and cash equivalents and current deposits in banks. |
| (*2) | Net borrowings to equity ratio is calculated by dividing total borrowings (including bonds and excluding lease liabilities and others) less cash and current deposits in banks by total equity. |
45
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| (e) | Determination of fair value |
| (i) | Measurement of fair value |
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
| i) | Current assets and liabilities |
The carrying amounts approximate their fair value because of the short maturity of these instruments.
| ii) | Trade receivables and other receivables |
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. The carrying amounts of current receivables approximate their fair value.
| iii) | Investments in equity and debt securities |
The fair value of marketable financial assets at FVTPL and FVOCI is determined by reference to their quoted closing bid price at the reporting date. The fair value of non-marketable instruments is determined using the results of fair value assessment performed by external valuation institutions and others.
| iv) | Non-derivative financial liabilities |
Fair value, which is determined for disclosure purposes, except for the liabilities at FVTPL, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.
| v) | Derivatives |
The inputs used to measure the fair value of currency forward and cross currency interest rate swap are calculated based on the exchange rates and interest rates observable in the market at the reporting date.
46
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| (ii) | Fair values versus carrying amounts |
The fair values of financial assets and liabilities, together with the carrying amounts shown in the condensed consolidated interim statements of financial position as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Carrying amounts |
Fair values | Carrying amounts |
Fair values | |||||||||||||
| Financial assets at amortized cost |
||||||||||||||||
| Cash and cash equivalents |
( | *1) | 2,257,522 | ( | *1) | |||||||||||
| Deposits in banks |
653,259 | ( | *1) | 905,982 | ( | *1) | ||||||||||
| Trade accounts and notes receivable |
2,944,680 | ( | *1) | 3,218,093 | ( | *1) | ||||||||||
| Non-trade receivables |
72,012 | ( | *1) | 112,739 | ( | *1) | ||||||||||
| Accrued income |
11,837 | ( | *1) | 14,246 | ( | *1) | ||||||||||
| Deposits |
18,514 | ( | *1) | 18,378 | ( | *1) | ||||||||||
| Loans |
55,693 | ( | *1) | 59,884 | ( | *1) | ||||||||||
| Other financial assets |
||||||||||||||||
| Lease receivables |
2,434 | ( | *1) | 4,130 | ( | *1) | ||||||||||
| Financial assets at fair value through profit or loss |
||||||||||||||||
| Equity securities |
90,984 | 87,027 | 87,027 | |||||||||||||
| Convertible securities |
3,185 | 3,185 | 3,127 | 3,127 | ||||||||||||
| Derivatives |
191,374 | 191,374 | 169,703 | 169,703 | ||||||||||||
| Financial assets effective for fair value hedging |
||||||||||||||||
| Derivatives |
35,398 | — | — | |||||||||||||
| Financial liabilities at fair value through profit or loss |
||||||||||||||||
| Derivatives |
26,120 | 63,526 | 63,526 | |||||||||||||
| Financial liabilities effective for fair value hedging |
||||||||||||||||
| Derivatives |
324 | 36,052 | 36,052 | |||||||||||||
| Financial liabilities at amortized cost |
||||||||||||||||
| Borrowings |
15,673,202 | 15,040,986 | 15,101,258 | |||||||||||||
| Bonds |
1,414,290 | 1,412,362 | 1,488,143 | 1,479,725 | ||||||||||||
| Trade accounts and notes payable |
4,432,283 | ( | *1) | 4,175,064 | ( | *1) | ||||||||||
| Other accounts payable |
2,264,482 | ( | *1) | 3,276,810 | ( | *1) | ||||||||||
| Security deposits received |
153,835 | ( | *1) | 153,370 | ( | *1) | ||||||||||
| Other financial liabilities |
||||||||||||||||
| Lease liabilities |
71,964 | ( | *2) | 73,364 | ( | *2) | ||||||||||
| (*1) | Excluded from disclosures as the carrying amount approximates fair value. |
| (*2) | Excluded from the fair value disclosures in accordance with Korean IFRS 1107 ‘Financial Instruments: Disclosures’. |
47
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| (iii) | Fair values of financial assets and liabilities |
| i) | Fair value hierarchy |
Financial instruments carried at fair value are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques. The different levels have been defined as follows:
| • | Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities |
| • | Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly |
| • | Level 3: inputs for the asset or liability that are not based on observable market data |
| ii) | Valuation techniques and inputs for Assets and Liabilities measured by the fair value hierarchy |
Fair value hierarchy classifications of the financial instruments that are measured at fair value as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||||||||||
| March 31, 2024 | Valuation technique |
Input | ||||||||||||||
| Classification |
Level 1 | Level 2 | Level 3 | |||||||||||||
| Financial assets at fair value through profit or loss |
||||||||||||||||
| Equity securities |
— | 90,984 | Discounted cash flow, etc. | Discount rate and Estimated cash flow, etc. | ||||||||||||
| Convertible securities |
— | — | 3,185 | Blended discount model and binominal option pricing model | Discount rate, stock price and volatility | |||||||||||
| Derivatives |
— | 191,374 | — | Discounted cash flow | Discount rate and Exchange rate | |||||||||||
| Financial assets effective for fair value hedging |
||||||||||||||||
| Derivatives |
— | 35,398 | — | Discounted cash flow | Discount rate and Exchange rate | |||||||||||
| Financial liabilities at fair value through profit or loss |
||||||||||||||||
| Derivatives |
26,120 | — | Discounted cash flow | Discount rate and Exchange rate | ||||||||||||
| Financial liabilities effective for fair value hedging |
||||||||||||||||
| Derivatives |
324 | — | Discounted cash flow | Discount rate and Exchange rate | ||||||||||||
48
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| (In millions of won) | ||||||||||||||||
| December 31, 2023 | Valuation technique |
Input | ||||||||||||||
| Classification |
Level 1 | Level 2 | Level 3 | |||||||||||||
| Financial assets at fair value through profit or loss |
||||||||||||||||
| Equity securities |
— | 87,027 | Discounted cash flow, etc. | Discount rate and Estimated cash flow, etc. | ||||||||||||
| Convertible securities |
— | — | 3,127 | Blended discount model and binominal option pricing model | Discount rate, stock price and volatility | |||||||||||
| Derivatives |
— | 169,703 | — | Discounted cash flow | Discount rate and Exchange rate | |||||||||||
| Financial liabilities at fair value through profit or loss |
||||||||||||||||
| Derivatives |
63,526 | — | Discounted cash flow | Discount rate and Exchange rate | ||||||||||||
| Financial liabilities effective for fair value hedging |
||||||||||||||||
| Derivatives |
36,052 | — | Discounted cash flow | Discount rate and Exchange rate | ||||||||||||
49
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| iii) | Financial instruments not measured at fair value but for which the fair value is disclosed |
Fair value hierarchy classifications, valuation technique and inputs for fair value measurements of the financial instruments not measured at fair value but for which the fair value is disclosed as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | Valuation technique |
Input | |||||||||||||
| Classification |
Level 1 | Level 2 | Level 3 | |||||||||||||
| Liabilities |
||||||||||||||||
| Borrowings |
— | 15,673,202 | Discounted cash flow | Discount rate | ||||||||||||
| Bonds |
— | — | 1,412,362 | Discounted cash flow | Discount rate | |||||||||||
| (In millions of won) | December 31, 2023 | Valuation technique |
Input | |||||||||||||
| Classification |
Level 1 | Level 2 | Level 3 | |||||||||||||
| Liabilities |
||||||||||||||||
| Borrowings |
— | 15,101,258 | Discounted cash flow | Discount rate | ||||||||||||
| Bonds |
— | — | 1,479,725 | Discounted cash flow | Discount rate | |||||||||||
50
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Financial Risk Management, Continued |
| iv) | The interest rates applied for determination of the above fair value as of March 31, 2024 and December 31, 2023 are as follows: |
| March 31, 2024 | December 31, 2023 | |||||||
| Borrowings, bonds and others |
4.20%~4.84 | % | 4.60%~5.02 | % | ||||
| v) | There is no transfer between Level 1, Level 2 and Level 3 for the three-month periods ended March 31, 2024 and 2023, and the changes in financial assets classified as Level 3 of fair value measurements for the three-month periods ended March 31, 2024 and 2023 is as follows: |
| (In millions of won) | ||||||||||||||||||||||||
| Classification |
January 1, 2024 |
Acquisition | Disposal | Valuation | Changes in Foreign Exchange Rates |
March 31, 2024 |
||||||||||||||||||
| Equity securities |
331 | (76 | ) | — | 3,702 | 90,984 | ||||||||||||||||||
| Convertible securities |
3,127 | — | — | — | 58 | 3,185 | ||||||||||||||||||
| (In millions of won) | ||||||||||||||||||||||||
| Classification |
January 1, 2023 |
Acquisition | Disposal | Valuation | Changes in Foreign Exchange Rates |
March 31, 2023 |
||||||||||||||||||
| Equity securities |
635 | (181 | ) | (7,776 | ) | 2,477 | 91,219 | |||||||||||||||||
| Convertible securities |
1,797 | — | — | — | — | 1,797 | ||||||||||||||||||
51
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Cash Flow Information |
| (a) | Cash flows from operating activities for the three-month periods ended March 31, 2024 and 2023 |
| (In millions of won) | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
| Loss for the period |
(1,153,100 | ) | ||||||
| Adjustments for: |
||||||||
| Income tax benefit (Note 23) |
(321,739 | ) | ||||||
| Depreciation and amortization (Note 19) |
1,279,177 | 1,018,196 | ||||||
| Gain on foreign currency translation |
(138,829 | ) | (86,217 | ) | ||||
| Loss on foreign currency translation |
340,407 | 276,372 | ||||||
| Expenses related to defined benefit plans (Note 13) |
33,908 | 37,498 | ||||||
| Gain on disposal of property, plant and equipment |
(5,629 | ) | (15,523 | ) | ||||
| Loss on disposal of property, plant and equipment |
16,791 | 33,041 | ||||||
| Impairment loss on property, plant and equipment |
69,618 | 3,890 | ||||||
| Reversal of impairment loss on property, plant and equipment |
— | (7 | ) | |||||
| Loss on disposal of intangible assets |
193 | 4 | ||||||
| Impairment loss on intangible assets |
49,996 | 2,429 | ||||||
| Reversal of impairment loss on intangible assets |
— | (122 | ) | |||||
| Expense on increase of provision |
8,918 | 18,582 | ||||||
| Finance income |
(167,439 | ) | (334,757 | ) | ||||
| Finance costs |
360,249 | 473,606 | ||||||
| Equity in loss (income) of equity method accounted investees, net |
(1,847 | ) | 567 | |||||
| Others |
(6,493 | ) | (1,689 | ) | ||||
|
|
|
|
|
|||||
| Changes in: |
||||||||
| Trade accounts and notes receivable |
42,645 | |||||||
| Other accounts receivable |
58,687 | (23,003 | ) | |||||
| Inventories |
(791,350 | ) | 121,508 | |||||
| Lease receivables |
1,727 | 1,402 | ||||||
| Other current assets |
(63,146 | ) | 13,713 | |||||
| Other non-current assets |
(9,340 | ) | (11,262 | ) | ||||
| Trade accounts and notes payable |
63,727 | (225,560 | ) | |||||
| Other accounts payable |
(525,091 | ) | (554,840 | ) | ||||
| Accrued expenses |
(49,836 | ) | (116,432 | ) | ||||
| Provisions |
(37,691 | ) | (46,390 | ) | ||||
| Advances received |
(12,989 | ) | (33,886 | ) | ||||
| Other current liabilities |
(26,722 | ) | (18,729 | ) | ||||
| Defined benefit liabilities, net |
(3,215 | ) | (16,992 | ) | ||||
| Long-term advances received |
— | 558,699 | ||||||
| Other non-current liabilities |
1,204 | 2,644 | ||||||
|
|
|
|
|
|||||
| Cash used in operations |
(355,452 | ) | ||||||
|
|
|
|
|
|||||
52
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Cash Flow Information, Continued |
| (b) | Changes in liabilities arising from financing activities for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||||||||||||||||||
| January 1, 2024 |
Non-cash transactions | |||||||||||||||||||||||
| Cash flows from financing activities |
Gain or loss on foreign currency translation |
Interest expense |
Others | March 31, 2024 |
||||||||||||||||||||
| Short-term borrowings |
(165,969 | ) | 49,263 | — | — | 1,758,929 | ||||||||||||||||||
| Long-term borrowings |
13,165,351 | 371,725 | 310,922 | 1,098 | 1,884 | 13,850,980 | ||||||||||||||||||
| Bonds |
1,488,143 | (80,000 | ) | 5,713 | 434 | — | 1,414,290 | |||||||||||||||||
| Lease liabilities |
73,364 | (18,091 | ) | 2,289 | — | 14,402 | 71,964 | |||||||||||||||||
| Dividend payable |
7,302 | (7,302 | ) | — | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
100,363 | 368,187 | 1,532 | 16,286 | 17,096,163 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (In millions of won) | ||||||||||||||||||||||||
| January 1, 2023 |
Non-cash transactions | |||||||||||||||||||||||
| Cash flows from financing activities |
Gain or loss on foreign currency translation |
Interest expense |
Others | March 31, 2023 |
||||||||||||||||||||
| Short-term borrowings |
(52,781 | ) | 34,683 | — | — | 2,560,454 | ||||||||||||||||||
| Long-term borrowings |
10,964,112 | 1,756,700 | 295,920 | 686 | 3,065 | 13,020,483 | ||||||||||||||||||
| Bonds |
1,448,746 | 146,160 | 3,650 | 412 | — | 1,598,968 | ||||||||||||||||||
| Lease liabilities |
72,788 | (20,938 | ) | 3,499 | — | 38,828 | 94,177 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
1,829,141 | 337,752 | 1,098 | 41,893 | 17,274,082 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
53
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others |
| (a) | Related parties |
Related parties as of March 31, 2024 are as follows:
| Classification |
Description | |
| Associates (*) |
Paju Electric Glass Co., Ltd. and others | |
| Entity that has significant influence over the Parent Company |
LG Electronics Inc. | |
| Subsidiaries of the entity that has significant influence over the Parent Company |
Subsidiaries of LG Electronics Inc. | |
| (*) | Details of associates are described in Note 8. |
54
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (b) | Major transactions with related parties for the periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | 2024 | |||||||||||||||||||||||
| Sales and others |
Purchase and others | |||||||||||||||||||||||
| Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | ||||||||||||||||||||
| Associates |
||||||||||||||||||||||||
| AVATEC Co., Ltd. |
200 | 91 | — | 20,861 | 2,288 | |||||||||||||||||||
| Paju Electric Glass Co., Ltd. |
— | — | 61,494 | — | — | 1,958 | ||||||||||||||||||
| WooRee E&L Co., Ltd. |
— | — | 1,982 | — | — | — | ||||||||||||||||||
| YAS Co., Ltd. |
— | — | 2,309 | 2,208 | — | 1,885 | ||||||||||||||||||
| Material Science Co., Ltd. |
— | — | — | — | — | 247 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
200 | 65,876 | 2,208 | 20,861 | 6,378 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Entity that has significant influence over the Parent Company |
||||||||||||||||||||||||
| LG Electronics Inc. |
— | 10,687 | 33,650 | — | 39,738 | |||||||||||||||||||
| Subsidiaries of the entity that has significant influence over the Parent Company |
||||||||||||||||||||||||
| LG Electronics India Pvt. Ltd. |
— | — | — | — | 130 | |||||||||||||||||||
| LG Electronics Vietnam Haiphong Co., Ltd. |
55,686 | — | — | — | — | 2,855 | ||||||||||||||||||
| LG Electronics Nanjing New Technology Co., Ltd. |
100,907 | — | — | — | — | 120 | ||||||||||||||||||
55
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (In millions of won) | 2024 | |||||||||||||||||||||||
| Sales and others |
Purchase and others | |||||||||||||||||||||||
| Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | ||||||||||||||||||||
| LG Electronics do Brasil Ltda. |
— | — | — | — | 14 | |||||||||||||||||||
| LG Innotek Co., Ltd. |
2,677 | — | 5,788 | — | — | 20,966 | ||||||||||||||||||
| LG Electronics Mlawa Sp. z o.o. |
195,934 | — | — | — | — | 422 | ||||||||||||||||||
| LG Electronics Reynosa S.A. DE C.V. |
159,231 | — | — | — | — | 283 | ||||||||||||||||||
| LG Electronics Egypt S.A.E |
2,813 | — | — | — | — | 5 | ||||||||||||||||||
| LG Electronics Japan, Inc. |
— | — | — | — | — | 1,572 | ||||||||||||||||||
| LG Electronics RUS, LLC |
— | — | — | — | — | 3,950 | ||||||||||||||||||
| P.T. LG Electronics Indonesia |
107,445 | — | — | — | — | 373 | ||||||||||||||||||
| HI-M Solutek Co., Ltd |
— | — | — | — | — | 2,397 | ||||||||||||||||||
| Others |
3 | — | 80 | — | — | 1,238 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
— | 5,868 | — | — | 34,325 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
200 | 82,431 | 35,858 | 20,861 | 80,441 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
56
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (In millions of won) | 2023 | |||||||||||||||||||||||
| Sales and others |
Purchase and others | |||||||||||||||||||||||
| Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | ||||||||||||||||||||
| Associates |
||||||||||||||||||||||||
| AVATEC Co., Ltd. |
— | 126 | — | 8,926 | 999 | |||||||||||||||||||
| Paju Electric Glass Co., Ltd. |
— | 15,200 | 29,539 | — | — | 584 | ||||||||||||||||||
| WooRee E&L Co., Ltd. |
— | — | 306 | — | — | — | ||||||||||||||||||
| YAS Co., Ltd. |
— | — | 1,723 | 7,985 | — | 1,200 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
15,200 | 31,694 | 7,985 | 8,926 | 2,783 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Entity that has significant influence over the Parent Company |
||||||||||||||||||||||||
| LG Electronics Inc. |
— | 4,366 | 114,903 | — | 37,013 | |||||||||||||||||||
| Subsidiaries of the entity that has significant influence over the Parent Company |
||||||||||||||||||||||||
| LG Electronics India Pvt. Ltd. |
— | — | — | — | 73 | |||||||||||||||||||
| LG Electronics Vietnam Haiphong Co., Ltd. |
140,929 | — | — | — | — | 219 | ||||||||||||||||||
| LG Electronics Nanjing New Technology Co., Ltd. |
93,477 | — | — | — | — | 81 | ||||||||||||||||||
57
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (In millions of won) | 2023 | |||||||||||||||||||||||
| Sales and others |
Purchase and others | |||||||||||||||||||||||
| Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | ||||||||||||||||||||
| LG Electronics do Brasil Ltda. |
— | — | — | — | 29 | |||||||||||||||||||
| LG Innotek Co., Ltd. |
1,671 | — | 5,979 | — | — | 21,002 | ||||||||||||||||||
| LG Electronics Mlawa Sp. z o.o. |
163,117 | — | — | — | — | 355 | ||||||||||||||||||
| LG Electronics Reynosa S.A. DE C.V. |
182,571 | — | — | — | — | 268 | ||||||||||||||||||
| LG Electronics Egypt S.A.E |
5,303 | — | — | — | — | 22 | ||||||||||||||||||
| LG Electronics Japan, Inc. |
— | — | — | 4 | — | 1,432 | ||||||||||||||||||
| P.T. LG Electronics Indonesia |
116,550 | — | — | — | — | 797 | ||||||||||||||||||
| LG Technology Ventures LLC |
— | — | — | — | — | 1,283 | ||||||||||||||||||
| HI-M Solutek Co., Ltd |
— | — | — | — | — | 2,109 | ||||||||||||||||||
| Others |
753 | — | 27 | — | — | 840 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
— | 6,006 | 4 | — | 28,510 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
15,200 | 42,066 | 122,892 | 8,926 | 68,306 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
58
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (c) | Balances of receivables and payables from transaction with related parties as at March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||||||||||
| Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||||
| March 31, 2024 |
December 31, 2023 |
March 31, 2024 |
December 31, 2023 |
|||||||||||||
| Associates |
||||||||||||||||
| AVATEC Co., Ltd. |
— | 6,345 | 4,775 | |||||||||||||
| Paju Electric Glass Co., Ltd. |
— | — | 64,334 | 56,136 | ||||||||||||
| WooRee E&L Co., Ltd. |
585 | 695 | 1,939 | 2,219 | ||||||||||||
| YAS Co., Ltd. |
— | — | 7,407 | 12,483 | ||||||||||||
| Material Science Co., Ltd. |
— | — | 267 | 118 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Subtotal |
695 | 80,292 | 75,731 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Entity that has significant influence over the Parent Company |
||||||||||||||||
| LG Electronics Inc.(*1) |
63,284 | 1,073,499 | 1,140,260 | |||||||||||||
| Subsidiaries of the entity that has significant influence over the Parent Company |
||||||||||||||||
| LG Electronics Vietnam Haiphong Co., Ltd. |
76,952 | 350 | 1,403 | |||||||||||||
| LG Electronics Nanjing New Technology Co., Ltd. |
75,576 | 38,502 | 26 | 27 | ||||||||||||
| LG Innotek Co., Ltd.(*2) |
2,636 | 3,002 | 221,104 | 216,049 | ||||||||||||
| LG Electronics Mlawa Sp. z o.o. |
140,992 | 101,357 | 13 | — | ||||||||||||
| LG Electronics Reynosa, S.A. DE C.V. |
83,048 | 64,208 | 63 | 109 | ||||||||||||
59
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (In millions of won) | ||||||||||||||||
| Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||||
| March 31, 2024 |
December 31, 2023 |
March 31, 2024 |
December 31, 2023 |
|||||||||||||
| P.T. LG Electronics Indonesia |
46,146 | 105 | 108 | |||||||||||||
| Others |
10,829 | 8,999 | 5,043 | 2,999 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Subtotal |
339,166 | 226,704 | 220,695 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
403,145 | 1,380,495 | 1,436,686 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (*1) | Trades accounts and notes payable and others for LG Electronics Inc. as of March 31, 2024 and
December 31, 2023 includes long-term borrowings of |
| (*2) | Trade accounts and note payable and others for LG Innotek Co., Ltd. as of March 31, 2024 and
December 31, 2023 Includes deposits received amount |
| (d) | Significant financial transactions with related parties for the three-month periods ended March 31, 2024 and 2023, is as follows: |
| i) | For the three-month period ended March 31, 2024 |
| (In millions of won) | ||||
| Associates |
Collection of loans | |||
| WooRee E&L Co., Ltd. | ||||
| ii) | For the three-month period ended March 31, 2023 |
| (In millions of won) | ||||
| Entity that has significant influence over the Parent Company |
Borrowings | |||
| LG Electronics Inc. | ||||
60
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (e) | Large Enterprise Group Transactions |
According to the ‘Related Party Disclosures’ under the Korean IFRS 1024, although not included in the scope of related parties, the major transaction details with the Large Enterprise Group subsidiaries and their affiliates, as well as the amounts of receivables and payables for the three-month periods ended March 31, 2024 and 2023 and as of March 31, 2024 and December 31, 2023, in accordance with the Monopoly Regulation and Fair Trade Act, are as follows:
| (In millions of won) | ||||||||||||||||
| For the three-month period ended March 31, 2024 |
March 31, 2024 | |||||||||||||||
| Sales and others |
Purchase and others |
Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||
| LG Uplus Corp. |
796 | — | 426 | |||||||||||||
| LG Chem Ltd. and its subsidiaries |
125 | 139,409 | 139 | 224,853 | ||||||||||||
| D&O Corp. and its subsidiaries |
78 | 58,024 | — | 92,079 | ||||||||||||
| LG Corp. (*) |
— | 13,011 | 18,857 | 5,626 | ||||||||||||
| LG Management Development Institute |
— | 10,054 | — | 625 | ||||||||||||
| LG CNS Co., Ltd. and its subsidiaries |
46 | 45,682 | — | 48,154 | ||||||||||||
| LG Household & Health Care and its subsidiaries | — | 47 | — | 44 | ||||||||||||
| HSADInc. and its subsidiaries |
— | 1,797 | — | 3,966 | ||||||||||||
| Robostar Co., Ltd. | — | 189 | — | 255 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 269,009 | 18,996 | 376,028 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (*) | According to the lease agreement signed with LG Corp., the recognized lease liabilities as of March 31,
2024 are |
61
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (In millions of won) | ||||||||||||||||
| For the three-month period ended March 31, 2023 |
December 31, 2023 | |||||||||||||||
| Sales and others |
Purchase and others |
Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||
| LG Uplus Corp. |
638 | — | 206 | |||||||||||||
| LG Chem Ltd. and its subsidiaries |
68 | 108,005 | 49 | 209,113 | ||||||||||||
| D&O Corp. and its subsidiaries |
1,501 | 334,122 | — | 105,757 | ||||||||||||
| LG Corp. (*1) | — | 11,162 | 16,261 | 5,575 | ||||||||||||
| LG Management Development Institute |
— | 10,764 | — | 543 | ||||||||||||
| LG CNS Co., Ltd. and its subsidiaries |
6 | 48,269 | 5 | 112,881 | ||||||||||||
| LG Household & Health Care Ltd. and its subsidiaries |
— | 56 | — | 1 | ||||||||||||
| HS AD Inc. (formerly, G2R Inc.) and its subsidiaries(2*) |
— | 6,204 | — | 5,687 | ||||||||||||
| Robostar Co., Ltd. |
— | 201 | — | 312 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 519,421 | 16,315 | 440,075 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (*1) | According to the lease agreement signed with LG Corp., the recognized lease liabilities as of December 31,
2023 are |
| (*2) | G2R Inc. changed its name to HS AD Inc. on July 1, 2023. |
62
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 27. | Related Parties and Others, Continued |
| (f) | Key management personnel compensation |
Compensation costs of key management for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Short-term benefits |
563 | |||||||
| Expenses related to the defined benefit plan |
325 | 89 | ||||||
|
|
|
|
|
|||||
| 652 | ||||||||
|
|
|
|
|
|||||
Key management refers to the registered directors who have significant control and responsibilities over the Parent Company’s operations and business.
| (g) | At the end of the reporting period, the Group did not set an allowance for doubtful accounts on the balance of receivables for related parties. |
| 28. | Subsequent Event |
On April 24, 2024, the Board of Directors resolved to sell part of the company’s land and buildings located in Paju, Gyeonggi-do, to LG U+ Co., Ltd. for W105,300 million for the purpose of enhancing asset utilization.
63
LG DISPLAY CO., LTD.
Condensed Separate Interim Financial Statements
(Unaudited)
March 31, 2024 and 2023
(With Report on Review of Condensed Interim Financial Statements)
Report on Review of Condensed Interim Financial Statements
(English Translation of a Report Originally Issued in Korean)
To the Shareholders and Board of Directors of
LG Display Co., Ltd.
Reviewed Financial Statements
We have reviewed the accompanying condensed interim financial statements of LG Display Co., Ltd (referred to as the “Company”). These condensed interim financial statements consist of the interim statement of financial position of the Company as at March 31, 2024, and the related interim statements of comprehensive income, changes in equity and cash flows for the three-month period ended March 31, 2024, and material accounting policy information and other selected explanatory notes, expressed in Korean won.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and presentation of these condensed interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of condensed interim financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on these condensed interim financial statements based on our review.
We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe the accompanying condensed interim financial statements are not prepared, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.
Other Matters
The statements of comprehensive income, changes in equity and cash flows for the three-month period ended March 31, 2023, presented herein for comparative purposes, were reviewed by another auditor whose report dated May 12, 2023. Based on their review, nothing has come to their attention that causes them to believe the accompanying condensed financial statements do not present fairly, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.
The statement of financial position as at December 31, 2023, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, not presented herein, were audited by another auditor who expressed an unqualified opinion on those statements on March 7, 2024. The statement of financial position as at December 31, 2023, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2023.
1
Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.
May 14, 2024
Seoul, Korea
This report is effective as of May 14, 2024, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.
2
LG DISPLAY CO., LTD.
Separate Interim Statements of Financial Position
As of March 31, 2024 and December 31, 2023
| (In millions of won) | Note | March 31, 2024 (unaudited) |
December 31, 2023 |
|||||||||
| Assets |
||||||||||||
| Cash and cash equivalents |
4, 24 | 334,502 | ||||||||||
| Deposits in banks |
4, 24 | 20,000 | 20,000 | |||||||||
| Trade accounts and notes receivable, net |
5, 15, 24, 26 | 2,953,654 | 3,077,901 | |||||||||
| Other accounts receivable, net |
5, 24 | 77,291 | 95,178 | |||||||||
| Other current financial assets |
6, 24 | 207,058 | 163,137 | |||||||||
| Inventories |
7 | 2,268,670 | 1,780,959 | |||||||||
| Prepaid income tax |
2,395 | 1,954 | ||||||||||
| Other current assets |
5 | 185,397 | 116,851 | |||||||||
|
|
|
|
|
|||||||||
| Total current assets |
5,813,484 | 5,590,482 | ||||||||||
| Deposits in banks |
4, 24 | 11 | 11 | |||||||||
| Investments |
8 | 5,764,915 | 4,932,063 | |||||||||
| Other non-current accounts receivable, net |
5, 24 | 12,854 | 13,833 | |||||||||
| Other non-current financial assets |
6, 24 | 90,695 | 80,793 | |||||||||
| Property, plant and equipment, net |
9 | 13,170,850 | 13,584,247 | |||||||||
| Intangible assets, net |
10 | 1,632,334 | 1,683,029 | |||||||||
| Investment property |
11 | 31,723 | 32,995 | |||||||||
| Deferred tax assets |
22 | 3,631,677 | 3,387,504 | |||||||||
| Defined benefits assets, net |
13 | 372,826 | 407,212 | |||||||||
| Other non-current assets |
29,037 | 20,243 | ||||||||||
|
|
|
|
|
|||||||||
| Total non-current assets |
24,736,922 | 24,141,930 | ||||||||||
|
|
|
|
|
|||||||||
| Total assets |
29,732,412 | |||||||||||
|
|
|
|
|
|||||||||
| Liabilities |
||||||||||||
| Trade accounts and notes payable |
24, 26 | 8,993,964 | ||||||||||
| Current financial liabilities |
12, 24, 25 | 4,959,799 | 3,850,822 | |||||||||
| Other accounts payable |
24 | 1,569,618 | 2,334,289 | |||||||||
| Accrued expenses |
425,350 | 461,819 | ||||||||||
| Provisions |
14 | 95,472 | 115,834 | |||||||||
| Advances received |
828,945 | 608,044 | ||||||||||
| Other current liabilities |
36,922 | 57,487 | ||||||||||
|
|
|
|
|
|||||||||
| Total current liabilities |
17,593,470 | 16,422,259 | ||||||||||
| Non-current financial liabilities |
12, 24, 25, 26 | 5,398,070 | 5,985,874 | |||||||||
| Non-current provisions |
14 | 56,022 | 63,805 | |||||||||
| Long-term advances received |
15 | 808,080 | 967,050 | |||||||||
| Other non-current liabilities |
24 | 611,629 | 611,869 | |||||||||
|
|
|
|
|
|||||||||
| Total non-current liabilities |
6,873,801 | 7,628,598 | ||||||||||
|
|
|
|
|
|||||||||
| Total liabilities |
24,467,271 | 24,050,857 | ||||||||||
|
|
|
|
|
|||||||||
| Equity |
||||||||||||
| Share capital |
16 | 2,500,000 | 1,789,079 | |||||||||
| Share premium |
16 | 2,821,006 | 2,251,113 | |||||||||
| Retained earnings |
762,129 | 1,641,363 | ||||||||||
|
|
|
|
|
|||||||||
| Total equity |
6,083,135 | 5,681,555 | ||||||||||
|
|
|
|
|
|||||||||
| Total liabilities and equity |
29,732,412 | |||||||||||
|
|
|
|
|
|||||||||
See accompanying notes to the condensed separate interim financial statements.
3
LG DISPLAY CO., LTD.
Separate Interim Statements of Comprehensive Loss
For the three-month periods ended March 31, 2024 and 2023
| (In millions of won, except loss per share amounts) | Note | 2024 (unaudited) |
2023 (unaudited) |
|||||||
| Revenue |
17, 26 | 3,942,097 | ||||||||
| Cost of sales |
7, 18, 26 | (5,239,288 | ) | (4,948,142 | ) | |||||
|
|
|
|
|
|||||||
| Gross loss |
(102,270 | ) | (1,006,045 | ) | ||||||
| Selling expenses |
18, 19 | (60,666 | ) | (70,732 | ) | |||||
| Administrative expenses |
18, 19 | (146,387 | ) | (148,877 | ) | |||||
| Research and development expenses |
18 | (335,497 | ) | (350,138 | ) | |||||
|
|
|
|
|
|||||||
| Operating loss |
(644,820 | ) | (1,575,792 | ) | ||||||
|
|
|
|
|
|||||||
| Finance income |
21 | 162,187 | 349,834 | |||||||
| Finance costs |
21 | (294,807 | ) | (408,259 | ) | |||||
| Other non-operating income |
20 | 343,785 | 265,167 | |||||||
| Other non-operating expenses |
18, 20 | (685,669 | ) | (454,710 | ) | |||||
|
|
|
|
|
|||||||
| Loss before income tax |
(1,119,324 | ) | (1,823,760 | ) | ||||||
| Income tax benefit |
22 | 242,879 | 418,006 | |||||||
|
|
|
|
|
|||||||
| Loss for the period |
(876,445 | ) | (1,405,754 | ) | ||||||
|
|
|
|
|
|||||||
| Other comprehensive loss |
||||||||||
| Items that will never be reclassified to profit or loss |
||||||||||
| Remeasurements of net defined benefit liabilities |
13 | (2,789 | ) | (545 | ) | |||||
| Other comprehensive loss for the period, net of income tax |
(2,789 | ) | (545 | ) | ||||||
|
|
|
|
|
|||||||
| Total comprehensive loss for the period |
(1,406,299 | ) | ||||||||
|
|
|
|
|
|||||||
| Loss per share (in won) |
||||||||||
| Basic loss per share |
23 | (3,691 | ) | |||||||
| Diluted loss per share |
23 | (3,691 | ) | |||||||
|
|
|
|
|
|||||||
See accompanying notes to the condensed separate interim financial statements.
4
LG DISPLAY CO., LTD.
Separate Interim Statements of Changes in Equity
For the three-month periods ended March 31, 2024 and 2023
| (In millions of won) | Share capital | Share premium |
Retained earnings |
Other capital |
Total equity | |||||||||||||||
| Balances at January 1, 2023 |
2,251,113 | 3,310,247 | — | 7,350,439 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total comprehensive loss for the period |
||||||||||||||||||||
| Loss for the period |
— | — | (1,405,754 | ) | — | (1,405,754 | ) | |||||||||||||
| Other comprehensive loss |
||||||||||||||||||||
| Remeasurements of net defined benefit liabilities |
— | — | (545 | ) | — | (545 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total comprehensive loss for the period |
— | (1,406,299 | ) | — | (1,406,299 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balances at March 31, 2023 (unaudited) |
2,251,113 | 1,903,948 | — | 5,944,140 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balances at January 1, 2024 |
2,251,113 | 1,641,363 | — | 5,681,555 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total comprehensive loss for the period |
||||||||||||||||||||
| Loss for the period |
— | — | (876,445 | ) | — | (876,445 | ) | |||||||||||||
| Other comprehensive loss |
||||||||||||||||||||
| Remeasurements of net defined benefit liabilities |
— | — | (2,789 | ) | — | (2,789 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total comprehensive loss for the period |
— | (879,234 | ) | — | (879,234 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Transaction with owners, recognized directly in equity |
||||||||||||||||||||
| Capital increase |
569,893 | — | — | 1,280,814 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balances at March 31, 2024 (unaudited) |
2,821,006 | 762,129 | — | 6,083,135 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See accompanying notes to the condensed separate interim financial statements.
5
LG DISPLAY CO., LTD.
Separate Interim Statements of Cash Flows
For the three-month periods ended March 31, 2024 and 2023
| (In millions of won) | Note | 2024 (unaudited) |
2023 (unaudited) |
|||||||||
| Cash flows from (used in) operating activities: |
25 | |||||||||||
| Cash generated from operating activities |
25 | (341,286 | ) | (615,910 | ) | |||||||
| Income taxes paid |
(904 | ) | (882 | ) | ||||||||
| Interests received |
2,656 | 5,225 | ||||||||||
| Interests paid |
(147,360 | ) | (144,059 | ) | ||||||||
|
|
|
|
|
|||||||||
| Cash used in operating activities |
(755,626 | ) | ||||||||||
|
|
|
|
|
|||||||||
| Cash flows from (used in) investing activities: |
||||||||||||
| Dividends received |
— | |||||||||||
| Proceeds from withdrawal of deposits in banks |
— | 2,098 | ||||||||||
| Acquisition of investments |
(832,852 | ) | (101,841 | ) | ||||||||
| Acquisition of property, plant and equipment |
(577,426 | ) | (932,043 | ) | ||||||||
| Proceeds from disposal of property, plant and equipment |
26,530 | 377,085 | ||||||||||
| Acquisition of intangible assets |
(193,917 | ) | (143,038 | ) | ||||||||
| Proceeds from disposal of intangible assets |
34 | — | ||||||||||
| Proceeds from settlement of derivatives |
85,172 | 28,925 | ||||||||||
| Increase in short-term loans |
4,497 | 3,129 | ||||||||||
| Increase in deposits |
(980 | ) | (5 | ) | ||||||||
| Decrease in deposits |
35 | 68 | ||||||||||
|
|
|
|
|
|||||||||
| Cash used in investing activities |
(1,479,941 | ) | (765,622 | ) | ||||||||
|
|
|
|
|
|||||||||
| Cash flows from (used in) financing activities: |
25 | |||||||||||
| Proceeds from short-term borrowings |
1,908,072 | 2,280,419 | ||||||||||
| Repayments of short-term borrowings |
(1,503,926 | ) | (2,018,242 | ) | ||||||||
| Proceeds from issuance of bonds |
— | 336,160 | ||||||||||
| Repayments of bonds |
(80,000 | ) | (190,000 | ) | ||||||||
| Proceeds from long-term borrowings |
1,000,155 | 1,714,020 | ||||||||||
| Repayments of long-term borrowings |
(871,835 | ) | (833,240 | ) | ||||||||
| Payment guarantee fee received |
1,918 | 1,633 | ||||||||||
| Repayments of payment guarantee fee |
(373 | ) | — | |||||||||
| Capital increase |
1,292,455 | — | ||||||||||
| Transaction cost from capital increase |
(11,640 | ) | — | |||||||||
| Payments of lease liabilities |
(3,474 | ) | (3,191 | ) | ||||||||
|
|
|
|
|
|||||||||
| Cash flows from financing activities |
1,731,352 | 1,287,559 | ||||||||||
|
|
|
|
|
|||||||||
| Net decrease in cash and cash equivalents |
(235,483 | ) | (233,689 | ) | ||||||||
| Cash and cash equivalents at January 1 |
334,502 | 692,312 | ||||||||||
|
|
|
|
|
|||||||||
| Cash and cash equivalents at March 31 |
458,623 | |||||||||||
|
|
|
|
|
|||||||||
See accompanying notes to the condensed separate interim financial statements.
6
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 1. | Organization and Description of Business |
LG Display Co., Ltd. (the “Company”) was incorporated in February 1985 and the Company is a public corporation listed in the Korea Exchange since 2004. The main business of the Company is to manufacture and sell displays and its related products. As of March 31, 2024, the Company is operating Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China and Vietnam. The Company is domiciled in the Republic of Korea with its address at 128 Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. As of March 31, 2024, LG Electronics Inc., a major shareholder of the Company, owns 36.72% (183,593,206 shares) of the Company’s common stock.
As of March 31, 2024, 500,000,000 shares of the Company’s common stock is listed on Korea Exchange under the identifying code 034220, and 15,741,012 American Depository Shares (“ADSs”, 2 ADSs represent one share of common stock) is listed on the New York Stock Exchange under the symbol “LPL”.
| 2. | Basis of Preparation |
The Company maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS). The accompanying (condensed) separate interim financial statements have been condensed, restructured and translated into English from the Korean language financial statements.
Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Company’s financial position, financial performance or cash flows, is not presented in the accompanying condensed separate interim financial statements.
| (a) | Application of accounting standards |
The Company’s condensed separate interim financial statements have been prepared in accordance with International Financial Reporting Standard as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Financial Reporting. These condensed separate interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the separate financial statements of the Company as of and for the year ended December 31, 2023.
These condensed interim financial statements are separate interim financial statements prepared in accordance with Korean IFRS 1027, Separate Financial Statements, presented by a parent, an investor in an associate, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees.
| (b) | Basis of Measurement |
The condensed separate interim financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:
| • | derivative financial instruments at fair value, financial assets at fair value through profit or loss (“FVTPL”), financial assets at fair value through other comprehensive income (“FVOCI”), financial liabilities at fair value through profit or loss (“FVTPL”), and |
| • | net defined benefit liabilities (defined benefit assets) recognized at the present value of defined benefit obligations less the fair value of plan assets |
7
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 2. | Basis of Preparation, Continued |
| (c) | Functional and Presentation Currency |
The condensed separate interim financial statements are presented in Korean won, which is the Company’s functional currency.
| (d) | Estimates and Judgments |
The preparation of the condensed separate interim financial statements in conformity with Korean IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
| (e) | Accounting standards and Interpretation issued and adopted by the Company |
The Company has applied the following new or amended accounting standards for the annual periods commencing January 1, 2024.
| (i) | Amendments to Korean IFRS 1001 Presentation of Financial Statements – Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants |
The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability includes the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. In addition, covenants that an entity is required to comply with after the end of the reporting period would not affect classification of a liability as current or non-current at the reporting date. When an entity classifies a liability that is subject to the covenants which an entity is required to comply with within twelve months of the reporting date as non-current at the end of the reporting period, the entity shall disclose information in the notes to understand the risk that non-current liabilities with covenants could become repayable within twelve months after the reporting period. The amendments do not have a significant impact on the financial statements.
| (ii) | Amendments to Korean IFRS 1007 Statement of Cash Flows, Korean IFRS 1107 Financial Instruments: Disclosures – Supplier finance arrangements |
When applying supplier finance arrangements, an entity shall disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk.
| (iii) | Amendments to Korean IFRS 1116 Leases – Lease Liability in a Sale and Leaseback |
When subsequently measuring lease liabilities arising from a sale and leaseback, a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee. The amendments do not have a significant impact on the financial statements.
8
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 2. | Basis of Preparation, Continued |
| (iv) | Amendments to Korean IFRS 1001 Presentation of Financial Statements – Disclosure of Cryptographic Assets |
The amendments require an additional disclosure if an entity holds cryptographic assets, or holds cryptographic assets on behalf of the customer, or issues cryptographic assets. The amendments do not have a significant impact on the financial statements.
| (f) | Accounting standards and Interpretation issued but not yet adopted by the Company |
The Accounting standards and Interpretation issued that have been enacted or amended but have not been applied because the effective date has not arrived are as follows:
Amendments to Korean IFRS 1021 The Effects of Changes in Foreign Exchange Rates and 1101 First-time Adoption of International Financial Reporting Standards – Lack of Exchangeability
When an entity estimates a spot exchange rate because exchangeability between two currencies is lacking, the entity shall disclose related information. The amendments should be applied for annual periods beginning on or after January 1, 2025, and earlier application is permitted. The Company is in review for the impact of these amendments on the financial statements.
| (g) | Income Tax Expense |
The Company is within the scope of the Pillar Two model rules, there is no additional income tax expenses recognized in relation to the rules and applied the exception to recognizing and disclosing information about deferred tax and assets and liabilities related to Pillar Two income Taxes.
9
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 3. | Accounting Policies |
The accounting policies followed by the Company in the preparation of its condensed separate interim financial statements are the same as those followed by the Company in its preparation of the separate financial statements as of and for the year ended December 31, 2023, except for the application of Korean IFRS 1034, Interim Financial Reporting.
| 4. | Cash and Cash Equivalents and Deposits in Banks |
Cash and cash equivalents and deposits in banks as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||||||
| March 31, 2024 | December 31, 2023 | |||||||||||
| Current assets |
||||||||||||
| Cash and cash equivalents |
||||||||||||
| Deposits |
334,502 | |||||||||||
| Deposits in banks |
||||||||||||
| Time deposits (*) |
20,000 | |||||||||||
| Non-current assets | ||||||||||||
| Deposits in banks |
||||||||||||
| Deposit for checking account |
11 | |||||||||||
| (*) | It consists of funds for business cooperation to aid LG Group companies’ suppliers, which is restricted in use. |
10
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 5. | Trade Accounts and Notes Receivable, Other Accounts Receivable and Others |
(a) Trade accounts and notes receivable as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Due from third parties, net |
172,109 | |||||||
| Due from related parties |
2,714,139 | 2,905,792 | ||||||
|
|
|
|
|
|||||
| Total |
3,077,901 | |||||||
|
|
|
|
|
|||||
(b) Other accounts receivable as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Current assets |
||||||||
| Non-trade receivables, net |
94,936 | |||||||
| Accrued income |
322 | 242 | ||||||
|
|
|
|
|
|||||
| Total |
95,178 | |||||||
|
|
|
|
|
|||||
| Non-current assets |
||||||||
| Long-term non-trade receivables |
13,833 | |||||||
|
|
|
|
|
|||||
| Total |
109,011 | |||||||
|
|
|
|
|
|||||
Due from related parties included in other accounts receivable, as of March 31, 2024 and December 31,
2023 are W37,020 million and W55,593 million, respectively.
(c) The aging of trade accounts and notes receivable and other accounts receivable as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | |||||||||||||||
| Original Amount | Allowance for doubtful account | |||||||||||||||
| Trade accounts and notes receivable |
Other accounts receivable |
Trade accounts and notes receivable |
Other accounts receivable |
|||||||||||||
| Not past due |
88,692 | (343 | ) | (57 | ) | |||||||||||
| 1-15 days past due |
5,499 | 95 | — | (1 | ) | |||||||||||
| 16-30 days past due |
— | 213 | — | (2 | ) | |||||||||||
| 31-60 days past due |
— | 22 | — | — | ||||||||||||
| More than 60 days past due |
— | 1,192 | — | (9 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
90,214 | (343) | (69 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
11
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 5. | Trade Accounts and Notes Receivable, Other Accounts Receivable and Others, Continued |
| (In millions of won) | December 31, 2023 | |||||||||||||||
| Original Amount | Allowance for doubtful account |
|||||||||||||||
| Trade accounts and notes receivable |
Other accounts receivable |
Trade accounts and notes receivable |
Other accounts receivable |
|||||||||||||
| Not past due |
105,816 | (234 | ) | (62 | ) | |||||||||||
| 1-15 days past due |
198 | 1,357 | — | — | ||||||||||||
| 16-30 days past due |
3,435 | 156 | — | (2 | ) | |||||||||||
| 31-60 days past due |
— | 168 | — | (2 | ) | |||||||||||
| More than 60 days past due |
— | 1,592 | — | (12 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
109,089 | (234 | ) | (78 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
The movement in the allowance for doubtful account in respect of trade accounts and notes receivable and other accounts receivable for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | March 31, 2024 | March 31, 2023 | ||||||||||||||
| Trade accounts and notes receivable |
Other accounts receivable |
Trade accounts and notes receivable |
Other accounts receivable |
|||||||||||||
| At January 1 |
78 | 229 | 1,418 | |||||||||||||
| (Reversal of) bad debt expense |
109 | (9 | ) | 49 | (25 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| At March 31 |
69 | 278 | 1,393 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (d) | Other current assets as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | March 31, 2024 | December 31, 2023 | ||||||
| Advanced payments |
1,220 | |||||||
| Prepaid expenses |
115,754 | 71,382 | ||||||
| Prepaid value added tax |
64,418 | 39,128 | ||||||
| Right to recover returned goods |
4,087 | 5,121 | ||||||
|
|
|
|
|
|||||
| Total |
116,851 | |||||||
|
|
|
|
|
|||||
12
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 6. | Other Financial Assets |
Other financial assets as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | December 31, 2023 | ||||||
| Current assets |
||||||||
| Financial assets at fair value through profit or loss |
||||||||
| Derivatives (*1) |
136,762 | |||||||
|
|
|
|
|
|||||
| Fair value hedging derivatives |
||||||||
| Derivatives (*2) |
— | |||||||
|
|
|
|
|
|||||
| Financial assets at amortized cost |
||||||||
| Short-term loans |
26,375 | |||||||
|
|
|
|
|
|||||
| Total |
163,137 | |||||||
|
|
|
|
|
|||||
| Non-current assets |
||||||||
| Financial assets at fair value through profit or loss |
||||||||
| Equity securities |
3,967 | |||||||
| Convertible securities |
1,838 | 1,838 | ||||||
| Derivatives (*1) |
39,536 | 32,941 | ||||||
|
|
|
|
|
|||||
| Subtotal |
38,746 | |||||||
|
|
|
|
|
|||||
| Fair value hedging derivatives |
||||||||
| Derivatives (*2) |
— | |||||||
|
|
|
|
|
|||||
| Financial assets at amortized cost |
||||||||
| Deposits |
8,538 | |||||||
| Long-term loans |
26,732 | 33,509 | ||||||
|
|
|
|
|
|||||
| Subtotal |
42,047 | |||||||
|
|
|
|
|
|||||
| Total |
80,793 | |||||||
|
|
|
|
|
|||||
| (*1) | The derivatives, which are not designated as hedging instruments, arise from cross currency interest swap contracts and others for the purpose of managing currency and interest rate risks associated with foreign currency denominated borrowings and bonds. |
| (*2) | The derivatives, which are designated as hedging instruments, arise from forward exchange contracts for the purpose of managing currency risk associated with advances received in foreign currency. |
13
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 7. | Inventories |
Inventories as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Finished goods |
279,483 | |||||||
|
Work-in-process |
1,289,158 | 1,005,025 | ||||||
| Raw materials |
500,800 | 408,078 | ||||||
| Supplies |
92,052 | 88,373 | ||||||
|
|
|
|
|
|||||
| Total |
1,780,959 | |||||||
|
|
|
|
|
|||||
For the three-month periods ended March 31, 2024 and 2023, the amount of inventories recognized as cost of sales and inventory valuation allowance are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Inventories recognized as cost of sales |
4,948,142 | |||||||
| Inventory valuation allowance |
162,215 | 176,646 | ||||||
| Use of inventory valuation allowance |
(153,844 | ) | (189,197 | ) | ||||
There were no significant reversals of inventory valuation allowance recognized during the three-month periods ended March 31, 2024 and 2023.
14
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 8. | Investments |
| (a) | Details of investments in subsidiaries as at March 31, 2024 and December 31, 2023, are as follows: |
| (In millions of won) | ||||||||||||||||||||
| March 31, 2024 | December 31, 2023 | |||||||||||||||||||
| Subsidiaries |
Location |
Business |
Percentage of ownership |
Carrying amount |
Percentage of ownership |
Carrying amount |
||||||||||||||
| LG Display America, Inc. |
San Jose, U.S.A. | Sales of display products | 100 | % | 100 | % | ||||||||||||||
| LG Display Germany GmbH |
Eschborn, Germany | Sales of display products | 100 | % | 19,373 | 100 | % | 19,373 | ||||||||||||
| LG Display Japan Co., Ltd. |
Tokyo, Japan | Sales of display products | 100 | % | 15,686 | 100 | % | 15,686 | ||||||||||||
| LG Display Taiwan Co., Ltd. |
Taipei, Taiwan | Sales of display products | 100 | % | 35,230 | 100 | % | 35,230 | ||||||||||||
| LG Display Nanjing Co., Ltd. |
Nanjing, China | Production of display products | 100 | % | 593,726 | 100 | % | 593,726 | ||||||||||||
| LG Display Shanghai Co., Ltd. |
Shanghai, China | Sales of display products | 100 | % | 9,093 | 100 | % | 9,093 | ||||||||||||
| LG Display Guangzhou Co., Ltd. |
Guangzhou, China | Production of display products | 100 | % | 293,557 | 100 | % | 293,557 | ||||||||||||
| LG Display Shenzhen Co., Ltd. |
Shenzhen, China | Sales of display products | 100 | % | 3,467 | 100 | % | 3,467 | ||||||||||||
| LG Display Singapore Pte. Ltd. |
Singapore | Sales of display products | 100 | % | 1,250 | 100 | % | 1,250 | ||||||||||||
| L&T Display Technology (Fujian) Limited |
Fujian, China | Production and sales of LCD module and LCD monitor sets | 51 | % | 10,123 | 51 | % | 10,123 | ||||||||||||
| LG Display Yantai Co., Ltd. |
Yantai, China | Production of display products | 100 | % | 169,195 | 100 | % | 169,195 | ||||||||||||
| Nanumnuri Co., Ltd. |
Gumi, South Korea | Business facility maintenance | 100 | % | 800 | 100 | % | 800 | ||||||||||||
| LG Display (China) Co., Ltd. |
Guangzhou, China | Production and sales of display products | 51 | % | 723,086 | 51 | % | 723,086 | ||||||||||||
| Unified Innovative Technology, LLC |
Wilmington, U.S.A. | Intellectual property management | 100 | % | 9,489 | 100 | % | 9,489 | ||||||||||||
| LG Display Guangzhou Trading Co., Ltd. |
Guangzhou, China | Sales of display products | 100 | % | 218 | 100 | % | 218 | ||||||||||||
| Global OLED Technology, LLC |
Sterling, U.S.A. | OLED intellectual property management | 100 | % | 164,322 | 100 | % | 164,322 | ||||||||||||
| LG Display Vietnam Haiphong Co., Ltd. |
Haiphong, Vietnam | Production of display products | 100 | % | 672,658 | 100 | % | 672,658 | ||||||||||||
| Suzhou Lehui Display Co., Ltd. |
Suzhou, China | Production and sales of LCD module and LCD monitor sets | 100 | % | 121,640 | 100 | % | 121,640 | ||||||||||||
| LG DISPLAY FUND I LLC(*1) |
Wilmington, U.S.A. | Investment in venture businesses and technologies | 100 | % | 91,757 | 100 | % | 91,105 | ||||||||||||
| LG Display High-Tech (China) Co., Ltd. |
Guangzhou, China | Production and sales of display products | 69 | % | 1,794,547 | 69 | % | 1,794,547 | ||||||||||||
| Money Market Trust(*2) |
Seoul, Korea | — | 100 | % | 925,100 | 100 | % | 92,900 | ||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total |
||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| (*1) | For the three-month period ended March 31, 2024, the Company contributed
|
| (*2) | For the three-month period ended March 31, 2024, the Company contributed |
15
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 8. | Investments, Continued |
| (b) | Details of investments in associates as at March 31, 2024 and December 31, 2023, are as follows: |
| (In millions of won) | ||||||||||||||||||||||
| March 31, 2024 | December 31, 2023 | |||||||||||||||||||||
| Associates |
Location |
Business | Percentage of ownership |
Carrying amount |
Percentage of ownership |
Carrying amount |
||||||||||||||||
| Paju Electric Glass Co., Ltd. |
Paju, South Korea | |
Production of glass for display |
|
40 | % | 40 | % | ||||||||||||||
| WooRee E&L Co., Ltd. |
Ansan, South Korea | |
Production of LED back light unit packages |
|
13 | % | 7,106 | 13 | % | 7,106 | ||||||||||||
| YAS Co., Ltd. |
Paju, South Korea | |
Development and production of evaporation equipment for OLEDs |
|
16 | % | 10,000 | 16 | % | 10,000 | ||||||||||||
| AVATEC Co., Ltd. |
Daegu, South Korea | |
Processing and Sales of glass for display |
|
14 | % | 8,000 | 14 | % | 8,000 | ||||||||||||
| Arctic Sentinel, Inc. |
Los Angeles, U.S.A. | |
Development and production of tablet for kids |
|
10 | % | — | 10 | % | — | ||||||||||||
| Cynora GmbH |
Bruchsal Germany | |
Development of organic light emitting materials for displays and lighting devices |
|
10 | % | — | 10 | % | — | ||||||||||||
| Material Science Co., |
Seoul, South Korea | |
Development, production and sales of materials for display |
|
15 | % | 3,588 | 16 | % | 3,588 | ||||||||||||
|
|
|
|
|
|||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||
| (*1) | For the three-month period ended March 31, 2024, due to the investee’s disposal of treasury shares, the Company’s percentage of ownership decreased from 16% to 15%. |
Although the Company’s respective share interests in WooRee E&L Co., Ltd., YAS Co., Ltd., AVATEC Co., Ltd., Arctic Sentinel, Inc., Cynora GmbH and Material Science Co., Ltd. are below 20%, the Controlling Company is able to exercise significant influence through its right to appoint one or more directors to the board of directors of each investee. Accordingly, the investments in these investees have been accounted for using the equity method.
Dividend
income recognized from subsidiaries and associates for the three-month periods ended March 31, 2024 and 2023 amounted to W670 million and W15,200 million, respectively.
16
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 9. | Property, Plant and Equipment |
For the three-month periods ended March 31, 2024 and 2023, the Company purchased property, plant and equipment of
W323,140 million and W689,393 million, respectively. The capitalized borrowing costs and the annualized capitalization rates were W16,761 million and 5.38%, and
W68,843 million and 4.95%, for the three-month periods ended March 31, 2024 and 2023, respectively. Also, for the three-month periods ended March 31, 2024 and 2023, the Company disposed of property, plant and
equipment with carrying amounts of W44,393 million and W393,365 million, respectively. And, the Company recognized W5,253 million and W16,791 million,
respectively, as gain and loss on disposal of property, plant and equipment for the three-month period ended March 31, 2024 (gain and loss on disposal of property, plant and equipment for the three-month period ended March 31, 2023:
W15,717 million and W32,998 million, respectively). For the three-month periods ended March 31, 2024 and 2023, impairment losses of W66,789 million and
W3,698 million are recognized respectively for the difference between the carrying amount and the recoverable amount of property, plant and equipment.
| 10. | Intangible Assets |
The Company capitalizes expenditures related to development activities, such as expenditures incurred on designing, manufacturing and testing
of products after those related activities meet the capitalization criteria of development costs including technical feasibility, future economic benefits and others. The balances of capitalized development costs as of March 31, 2024 and
December 31, 2023 are W631,854 million and W641,461 million, respectively. For the three-month periods ended March 31, 2024 and 2023, the Company recognized impairment losses amounting to
W45,368 million and W1,962 million, respectively, in connection with development projects.
| 11. | Investment Property |
| (a) | Changes in investment properties for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | 2024 | 2023 | ||||||
| At January 1 |
28,269 | |||||||
| Depreciation |
(1,272 | ) | (1,226 | ) | ||||
|
|
|
|
|
|||||
| At March 31 |
27,043 | |||||||
|
|
|
|
|
|||||
| (b) | For the three-month period ended March 31, 2024, rental income from investment property is
|
17
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 12. | Financial Liabilities |
| (a) | Financial liabilities as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | March 31, 2024 | December 31, 2023 | ||||||
| Current |
||||||||
| Short-term borrowings |
1,428,213 | |||||||
| Current portion of long-term borrowings |
2,166,664 | 2,000,930 | ||||||
| Current portion of long-term bonds |
901,074 | 369,716 | ||||||
| Current portion of payment guarantee liabilities |
6,810 | 6,780 | ||||||
| Derivatives (*1) |
7,435 | 26,193 | ||||||
| Fair value hedging derivatives (*2) |
— | 7,392 | ||||||
| Lease liabilities |
11,143 | 11,598 | ||||||
|
|
|
|
|
|||||
| Total |
3,850,822 | |||||||
|
|
|
|
|
|||||
| Non-current |
||||||||
| Long-term borrowings |
4,784,819 | |||||||
| Bonds |
513,216 | 1,118,427 | ||||||
| Payment guarantee liabilities |
12,854 | 13,833 | ||||||
| Derivatives (*1) |
18,685 | 37,333 | ||||||
| Fair value hedging derivatives (*2) |
324 | 28,660 | ||||||
| Lease liabilities |
3,653 | 2,802 | ||||||
|
|
|
|
|
|||||
| Total |
5,985,874 | |||||||
|
|
|
|
|
|||||
| (*1) | The derivatives, which are not designated as hedging instruments, arise from cross currency interest swap contracts and others for the purpose of managing currency and interest rate risks associated with foreign currency denominated borrowings and bonds. |
| (*2) | The derivatives, which are designated as hedging instruments, arise from forward exchange contracts for the purpose of managing currency risk associated with advances received in foreign currency. |
| (b) | Details of short-term borrowings as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||||||
| Lender |
Description | Annual interest rate as of March 31, 2024 (%) |
March 31, 2024 |
December 31, 2023 |
||||||||
| Standard Chartered Bank Korea Limited and others |
Working Capital and others |
3.50~6.98 | 1,428,213 | |||||||||
18
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 12. | Financial Liabilities, Continued |
| (c) | Details of Won denominated long-term borrowings as of March 31, 2024 and December 31, 2023 are as follows : |
| (In millions of won) | ||||||||||||||||||||
| Lender |
Description | Maturity | Annual interest rate as of March 31, 2024 (%) |
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
| LG Electronics Inc. |
|
Operating capital |
|
March 2026 | 6.06 | 1,000,000 | ||||||||||||||
| Korea Development Bank and others |
|
Facility capital and others |
|
|
July 2024~ March 2030 |
|
1.90~6.65 | 3,763,753 | 3,490,967 | |||||||||||
| Less : current portion of long-term borrowings |
(1,183,500 | ) | (776,000 | ) | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total |
3,714,967 | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| (d) | Details of foreign currency denominated long-term borrowings as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won and USD) | ||||||||||||||||||||
| Lender |
Description | Maturity | Annual interest rate as of March 31, 2024 (%) |
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
| KEB Hana Bank and others |
|
Facility capital and others |
|
|
May 2024~ March 2029 |
|
1.82~8.60 | 2,294,782 | ||||||||||||
| Foreign currency equivalent of foreign currency borrowings |
USD 1,673 | USD 1,780 | ||||||||||||||||||
| Less : current portion of long-term borrowings |
(983,164 | ) | (1,224,930 | ) | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total |
1,069,852 | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
19
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 12. | Financial Liabilities, Continued |
| (e) | Details of bonds issued and outstanding as of March 31, 2024 and December 31, 2023 are as follows : |
| (In millions of won and USD) | ||||||||||||||||
| Maturity | Annual interest rate as of March 31, 2024 (%) |
March 31, 2024 |
December 31, 2023 |
|||||||||||||
| Won denominated bonds at amortized cost (*1) |
||||||||||||||||
| Publicly issued bonds |
|
September 2024~ February 2027 |
|
2.29~3.66 | 1,025,000 | |||||||||||
| Privately issued bonds |
|
January 2025~ January 2026 |
|
7.20~7.25 | 337,000 | 337,000 | ||||||||||
| Less : discount on bonds |
(1,753 | ) | (2,120 | ) | ||||||||||||
| Less : current portion |
(901,074 | ) | (369,716 | ) | ||||||||||||
|
|
|
|
|
|||||||||||||
| Subtotal |
990,164 | |||||||||||||||
|
|
|
|
|
|||||||||||||
| Foreign currency denominated bonds at amortized cost (*2) |
||||||||||||||||
| Privately issued bonds |
April 2026 | 7.22 | 128,940 | |||||||||||||
| Foreign currency equivalent |
USD 100 | USD 100 | ||||||||||||||
| Less : discount on bonds |
(637 | ) | (677 | ) | ||||||||||||
| Less : discount on bonds of Foreign currency denominated bonds |
— | USD (1 | ) | |||||||||||||
|
|
|
|
|
|||||||||||||
| Subtotal |
128,263 | |||||||||||||||
|
|
|
|
|
|||||||||||||
| Total |
1,118,427 | |||||||||||||||
|
|
|
|
|
|||||||||||||
| (*1) | Principal of the won denominated bonds is to be repaid at maturity and interests are paid quarterly. |
| (*2) | Principal of the foreign currency denominated bonds is to be repaid at maturity and interests are paid quarterly. |
20
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 13. | Post-employment Benefits |
The Company’s defined benefit plans provide a lump-sum payment to an employee based on final salary rates and length of service at the time the employee leaves the Company.
| (a) | Net defined benefit liabilities (defined benefit assets) recognized as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Present value of defined benefit obligations |
1,482,976 | |||||||
| Fair value of plan assets |
(1,820,424 | ) | (1,890,188 | ) | ||||
|
|
|
|
|
|||||
| Total |
(407,212 | ) | ||||||
|
|
|
|
|
|||||
| (b) | Plan assets as of March 31, 2024 and December 31, 2023 are as follows: |
| (In millions of won) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Time deposits in banks |
1,890,188 | |||||||
As of March 31, 2024, the Company maintains the plan assets primarily with Shinhan Bank, KEB Hana Bank and others.
| (c) | Expenses related to defined benefit plans recognized in profit or loss for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Current service cost |
42,870 | |||||||
| Net interest cost |
(4,714 | ) | (5,986 | ) | ||||
|
|
|
|
|
|||||
| Total |
36,884 | |||||||
|
|
|
|
|
|||||
| (d) | Remeasurements of the net defined benefit liabilities (assets) included in other comprehensive income (loss) for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Remeasurements of net defined benefit liabilities |
(702 | ) | ||||||
| Tax effect |
831 | 157 | ||||||
|
|
|
|
|
|||||
| Remeasurements of net defined benefit liabilities, net of income tax |
(545 | ) | ||||||
|
|
|
|
|
|||||
21
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 14. | Provisions |
Changes in provisions for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||||||||||
| Litigation | Warranties (*) | Others | Total | |||||||||||||
| At January 1, 2024 |
171,952 | 5,880 | 179,638 | |||||||||||||
| Additions (reversal) |
64 | (2,289 | ) | (1,495 | ) | (3,720 | ) | |||||||||
| Usage |
— | (24,424 | ) | — | (24,424 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| At March 31, 2024 |
145,239 | 4,385 | 151,494 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Current |
89,217 | 4,385 | 95,472 | |||||||||||||
| Non-current |
56,022 | — | 56,022 | |||||||||||||
| (*) | The Company provides warranty on defective products for warranty periods after sales. The provision is calculated based on the assumption of expected number of warranty claims and costs per claim considering historical experience. |
| (In millions of won) | ||||||||||||||||
| Litigation | Warranties (*) | Others | Total | |||||||||||||
| At January 1, 2023 |
248,137 | 8,432 | 258,249 | |||||||||||||
| Additions (reversal) |
96 | 5,647 | (1,880 | ) | 3,863 | |||||||||||
| Usage |
— | (31,900 | ) | — | (31,900 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| At March 31, 2023 |
221,884 | 6,552 | 230,212 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Current |
145,563 | 6,552 | 153,891 | |||||||||||||
| Non-current |
76,321 | — | 76,321 | |||||||||||||
| (*) | The Company provides warranty on defective products for warranty periods after sales. The provision is calculated based on the assumption of expected number of warranty claims and costs per claim considering historical experience. |
22
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 15. | Contingent Liabilities and Commitments |
| (a) | Legal Proceedings |
Anti-trust litigations
The Company and other LCD panel manufacturers have been sued by individual claimants on allegations of violating EU competition laws. While the Company continues its vigorous defense of the various pending proceedings described above, as of March 31, 2024, the Company cannot predict the final outcomes of the lawsuits that have been filed.
Others
The Company is involved in various lawsuits and disputes in addition to the pending proceedings described above. The Company cannot reliably estimate the timing and amount of outflows of resources embodying economic benefits relating to the disputes.
| (b) | Commitments |
Factoring and securitization of accounts receivable
The Company has discount agreements with Korea Development Bank and other banks for accounts receivable related to export sales transactions
with its subsidiary, up to USD 1,000 million (W1,346,800 million). As of March 31, 2024, there is no amount of the discounted accounts receivable that are not past due in connection with these agreements. In relation to
the above contract, the financial institutions have the recourse for account receivables that are past due.
The Company has assignment
agreements with MUFG Bank and other banks for accounts receivable related to domestic and export sales transactions, up to W525,252 million. As of March 31, 2024, there is no amount of the sold accounts receivable that are
not past due in connection with these agreements. In relation to the above contract, the financial institutions do not have the recourse for account receivables that are past due.
23
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 15. | Contingent Liabilities and Commitments, Continued |
Letters of credit
The Company has entered into agreements with a financial institutions to open letter of credit (L/C), etc., and as of March 31, 2024, the credit limits for each agreement are as follows:
| (In millions of won, USD) | ||||||||
| Contractual amount |
KRW equivalent |
|||||||
| KEB Hana Bank |
USD 450 | |||||||
| Industrial Bank of Korea |
USD 450 | 606,060 | ||||||
| Industrial and Commercial Bank of China |
USD 200 | 269,360 | ||||||
| Shinhan Bank |
USD 70 | 94,276 | ||||||
| KB Kookmin Bank |
USD 700 | 942,760 | ||||||
| MUFG Bank |
USD 100 | 134,680 | ||||||
| The Export–Import Bank of Korea |
USD 100 | 134,680 | ||||||
|
|
|
|
|
|||||
| Total |
USD 2,070 | |||||||
|
|
|
|
|
|||||
Payment guarantees
The Company provides payment guarantee to LG Display Vietnam Haiphong Co., Ltd. for the loan principal of USD 1,402 million
(W1,888,513 million).
In addition, the Company obtained payment guarantees of USD 1,200 million
(W1,616,160 million) from KB Kookmin Bank and other banks for advances received related to the long-term supply agreements.
Patent and License agreements
As of March 31, 2024, the Company has patent license agreements with Hitachi Display, Ltd. and others in relation to its LCD business and patent license agreements with Universal Display Corporation and others in relation to its OLED business. Also, as of March 31, 2024, the Company has a trademark license agreement with LG Corp. and license agreements with other companies for patents, trademarks and other intellectual property rights.
Long-term supply agreement
As of March 31, 2024, in connection with long-term supply agreements with customers, the Company recognized advances received of USD
1,200 million (W1,616,160 million). The advances received will be used to offset against accounts receivable arising from future product sales after a certain period of time from the date of receipt. In relation to this, the
Company received payment guarantees of USD 1,200 million(W1,616,160 million) from KB Kookmin Bank and other banks. (see note 15(b) payment guarantees).
24
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 15. | Contingent Liabilities and Commitments, Continued |
Collateral
The details of the collateral provided by the Company are as follows :
| (In millions of won) | ||||||||||||
| Collateral |
Carrying |
Maximum bond amount |
Secured creditor |
Collateral borrowings amount |
||||||||
| Property plant and equipment and others |
1,200,000 | LG Electronics Inc. | 1,000,000 | |||||||||
| 82,354 | 326,400 | Korea Development Bank and others | 204,000 | |||||||||
| 255,655 | 780,000 | Korea Development Bank and others | 300,000 | |||||||||
The carrying amount of collateral asset, amounting to W255,655 million, includes
collateral asset of W82,354 million for collateral borrowings of W204,000 million from Korea Development Bank and other banks.
The details of the collateral received are as follows :
| (In millions of won, USD and CNY) | ||||||||||||
| Collateral |
Carrying |
Maximum bond amount |
Secured creditor |
Collateral borrowings amount |
||||||||
| Deposits in banks and others(*) |
CNY 4,306 | 799,840 | Shinhan Bank and others | USD 200 | ||||||||
| 450,000 | ||||||||||||
| (*) | The Company receives Deposits in banks and others as collateral from LG Display Nanjing Co., Ltd. |
Commitments for asset acquisition
The amount committed to acquire property, plant, equipment and intangible assets not recognized on the financial statements as of
March 31, 2024 is W473,402 million.
25
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 16. | Share Capital and Share Premium |
The total number of shares to be issued by the Company is 500,000,000 shares, the number of shares issued is 500,000,000 shares (December 31,
2023 : 357,815,700 shares), and the par value per share is W5,000.
The Company conducted a paid-in capital increase based on the resolution of the board of directors on December 18, 2023, and the newly issued shares were listed on the Korea Exchange (KRX) on March 26, 2024.
With the new shares of common stock, the capital stock increased by W710,921 million to
W2,500,000 million
| Classification |
Description | |
| Purpose |
Facility capital, operating capital and debt repayment | |
| Type of shares issued |
Common stock | |
| Number of shares issued |
142,184,300 shares | |
| The amount per shares |
The capital surplus consists of share premium and due to the capital increase during this quarter, the share
premium increased by W569,893 million to W2,821,006 million.
| 17. | Revenue |
Details of revenue for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Sales of goods |
3,931,062 | |||||||
| Royalties |
2,680 | 2,810 | ||||||
| Others |
8,679 | 8,225 | ||||||
|
|
|
|
|
|||||
| Total |
3,942,097 | |||||||
|
|
|
|
|
|||||
26
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 18. | The Nature of Expenses |
The classification of expenses by nature for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Changes in inventories |
(8,237 | ) | ||||||
| Purchases of raw materials and others |
1,884,334 | 1,478,157 | ||||||
| Depreciation and amortization |
775,233 | 543,781 | ||||||
| Outsourcing |
2,220,884 | 2,152,690 | ||||||
| Labor |
661,210 | 631,148 | ||||||
| Supplies and others |
157,532 | 161,552 | ||||||
| Utility |
251,604 | 208,948 | ||||||
| Fees and commissions |
103,913 | 107,858 | ||||||
| Shipping |
15,228 | 8,986 | ||||||
| Advertising |
14,279 | 17,664 | ||||||
| Travel |
13,455 | 12,085 | ||||||
| Taxes and dues |
19,327 | 16,420 | ||||||
| Others |
289,732 | 225,998 | ||||||
|
|
|
|
|
|||||
| Total |
5,557,050 | |||||||
|
|
|
|
|
|||||
Total expenses consist of cost of sales, selling, administrative, research and development expenses and other non-operating expenses, excluding foreign exchange differences.
27
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 19. | Selling and Administrative Expenses |
Details of selling and administrative expenses for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Salaries |
62,788 | |||||||
| Expenses related to defined benefit plans |
5,375 | 5,741 | ||||||
| Other employee benefits |
12,541 | 13,518 | ||||||
| Shipping |
5,379 | 3,932 | ||||||
| Fees and commissions |
48,777 | 45,564 | ||||||
| Depreciation |
38,067 | 37,427 | ||||||
| Taxes and dues |
1,104 | 1,010 | ||||||
| Advertising |
14,279 | 17,664 | ||||||
| Insurance |
2,145 | 2,518 | ||||||
| Travel |
2,707 | 3,851 | ||||||
| Training |
3,609 | 3,690 | ||||||
| Others |
11,397 | 21,906 | ||||||
|
|
|
|
|
|||||
| Total |
219,609 | |||||||
|
|
|
|
|
|||||
28
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 20. | Other Non-operating Income and Other Non-operating Expenses |
| (a) | Details of other non-operating income for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Foreign currency gain |
248,340 | |||||||
| Gain on disposal of property, plant and equipment |
5,253 | 15,717 | ||||||
| Reversal of impairment loss on intangible assets |
— | 122 | ||||||
| Rental income |
450 | 495 | ||||||
| Others |
851 | 493 | ||||||
|
|
|
|
|
|||||
| Total |
265,167 | |||||||
|
|
|
|
|
|||||
| (b) | Details of other non-operating expenses for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) |
||||||||
| 2024 | 2023 | |||||||
| Foreign currency loss |
415,549 | |||||||
| Loss on disposal of property, plant and equipment |
16,791 | 32,998 | ||||||
| Impairment loss on property, plant and equipment |
66,789 | 3,698 | ||||||
| Loss on disposal of intangible assets |
193 | 4 | ||||||
| Impairment loss on intangible assets |
49,996 | 2,429 | ||||||
| Others |
3,413 | 32 | ||||||
|
|
|
|
|
|||||
| Total |
454,710 | |||||||
|
|
|
|
|
|||||
29
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 21. | Finance Income and Finance Costs |
Finance income and costs recognized in profit or loss for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Finance income |
||||||||
| Interest income |
4,620 | |||||||
| Dividend income |
670 | 15,200 | ||||||
| Foreign currency gain |
11,680 | 27,342 | ||||||
| Gain on transaction of derivatives |
85,172 | 28,925 | ||||||
| Gain on valuation of derivatives |
59,784 | 272,024 | ||||||
| Others |
1,901 | 1,723 | ||||||
|
|
|
|
|
|||||
| Total |
349,834 | |||||||
|
|
|
|
|
|||||
| Finance costs |
||||||||
| Interest expense |
74,215 | |||||||
| Foreign currency loss |
144,292 | 108,277 | ||||||
| Loss on sale of trade accounts and notes receivable |
209 | 230 | ||||||
| Loss on valuation of financial assets at fair value through profit or loss |
— | 7,776 | ||||||
| Loss on valuation of derivatives |
707 | 217,126 | ||||||
| Others |
2,740 | 635 | ||||||
|
|
|
|
|
|||||
| Total |
408,259 | |||||||
|
|
|
|
|
|||||
30
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 22. | Income Tax Benefit |
| (a) | Details of income tax benefit for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Current tax expense |
193 | |||||||
| Deferred tax benefit |
(243,343 | ) | (418,199 | ) | ||||
|
|
|
|
|
|||||
| Income tax benefit |
(418,006 | ) | ||||||
|
|
|
|
|
|||||
| (b) | Deferred tax assets and liabilities: |
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that the deferred tax assets at the reporting date will be realized with the Company’s estimated future taxable income. The Company’s deferred tax assets and liabilities may differ from actual refundable or payable amount.
Deferred tax assets and liabilities as of March 31, 2024 and December 31, 2023 are attributable to the following:
| (In millions of won) | Assets | Liabilities | Total | |||||||||||||||||||||
| March 31, 2024 |
December 31, 2023 |
March 31, 2024 |
December 31, 2023 |
March 31, 2024 |
December 31, 2023 |
|||||||||||||||||||
| Other accounts receivable, net |
— | (73 | ) | (61 | ) | (73 | ) | (61 | ) | |||||||||||||||
| Inventories, net |
29,218 | 28,607 | — | — | 29,218 | 28,607 | ||||||||||||||||||
| Defined benefit liabilities |
— | — | (69,929 | ) | (89,753 | ) | (69,929 | ) | (89,753 | ) | ||||||||||||||
| Accrued expenses |
68,698 | 93,511 | — | — | 68,698 | 93,511 | ||||||||||||||||||
| Property, plant and equipment |
370,622 | 389,828 | — | — | 370,622 | 389,828 | ||||||||||||||||||
| Intangible assets |
31,038 | 10,504 | — | — | 31,038 | 10,504 | ||||||||||||||||||
| Provisions |
33,357 | 39,586 | — | — | 33,357 | 39,586 | ||||||||||||||||||
| Subsidiaries and associates |
89,033 | 89,033 | (10,839 | ) | (10,839 | ) | 78,194 | 78,194 | ||||||||||||||||
| Other temporary differences |
21,981 | 22,977 | (11,307 | ) | (11,444 | ) | 10,674 | 11,533 | ||||||||||||||||
| Tax loss carryforwards |
2,937,695 | 2,677,340 | — | — | 2,937,695 | 2,677,340 | ||||||||||||||||||
| Tax credit carryforwards |
142,183 | 148,215 | — | — | 142,183 | 148,215 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Deferred tax assets (liabilities) |
3,499,601 | (92,148 | ) | (112,097 | ) | 3,631,677 | 3,387,504 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (c) | Global Minimum Tax |
Under Pillar Two legislation, the Company is liable to pay a top-up tax for the difference between the GloBE effective tax rate per jurisdiction and the 15% minimum rate. The Company has assessed its impact of the Pillar Two legislation on its financial statements. As a result of the assessment, the Company has no current tax expenses related to Pillar Two legislation for the three-month period ended March 31, 2024.
.
31
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 23. | Loss per Share |
| (a) | Basic loss per share for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In won and No. of shares) | ||||||||
| 2024 | 2023 | |||||||
| Loss for the period |
(1,405,754,249,735 | ) | ||||||
| Weighted-average number of common shares outstanding |
384,377,602 | 380,884,673 | ||||||
|
|
|
|
|
|||||
| Basic loss per share |
(3,691 | ) | ||||||
|
|
|
|
|
|||||
Due to paid-in capital increase during the current quarter, the number of outstanding shares has increased. The weighted-average number of common shares outstanding for previous period has been adjusted considering a bonus element in a rights issue to existing shareholders during the current quarter.
| (b) | The Company has no potential dilutive ordinary shares, and accordingly, basic loss per share is identical to diluted loss per share. |
32
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management |
The Company is exposed to credit risk, liquidity risk and market risk. The Company identifies and analyzes such risks, and controls are implemented under a risk management system to monitor and manage these risks at below an acceptable level.
| (a) | Market risk |
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
| (i) | Currency risk |
The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Company, Korean won (KRW). The currencies in which these transactions primarily are denominated are USD, JPY, etc.
Interest on borrowings is accrued in the currency of the borrowing. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Company, primarily KRW and USD.
The Company adopts policies to ensure that its net exposure is kept to a manageable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances. In respect of monetary assets and liabilities denominated in foreign currencies, the Company manages currency risk through continuously managing the position of foreign currencies, measuring the currency risk and, if necessary, using derivatives such as currency forwards, currency swap and others.
33
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| i) | Exposure to currency risk |
The Company’s exposure to primarily foreign currency risk based on notional amounts as of March 31, 2024 and December 31, 2023 is as follows:
| (In millions) | March 31, 2024 | |||||||||||
| Foreign currency asset | Foreign currency liability | Net exposure | ||||||||||
| USD |
2,556 | (6,856 | ) | (4,300 | ) | |||||||
| JPY |
200 | (15,331 | ) | (15,131 | ) | |||||||
Foreign currency assets and liabilities include derivatives assets and liabilities from cross currency interest rate swap contracts and forward exchange contracts.
Cross currency interest rate swap contracts, USD 800 million and CNY 345 million were entered into to manage currency risk with respect to foreign currency denominated borrowings and USD 1,293 million were entered into to manage currency risk and interest rate risk with respect to foreign currency denominated borrowings and bonds.
Forward exchange contracts, USD 1,200 million, were entered into by the Company to manage currency risk with respect to advances received in foreign currency.
| (In millions) | December 31, 2023 | |||||||||||
| Foreign currency asset | Foreign currency liability | Net exposure | ||||||||||
| USD |
2,682 | (6,580 | ) | (3,898 | ) | |||||||
| JPY |
286 | (17,126 | ) | (16,840 | ) | |||||||
Foreign currency assets and liabilities include derivatives assets and liabilities from cross currency interest rate swap contracts and forward exchange contracts.
Cross currency interest rate swap contracts, USD 500 million and CNY 345 million were entered into to manage currency risk with respect to foreign currency denominated borrowings and USD 1,430 million were entered into to manage currency risk and interest rate risk with respect to foreign currency denominated borrowings and bonds.
Forward exchange contracts, USD 1,200 million, were entered into by the Company to manage currency risk with respect to advances received in foreign currency.
34
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
Average exchange rates applied for the three-month periods ended March 31, 2024 and 2023 and the exchange rates at March 31, 2024 and December 31, 2023 are as follows:
| (In won) | Average rate | Reporting date spot rate | ||||||||||||||
| 2024 | 2023 | March 31, 2024 |
December 31, 2023 |
|||||||||||||
| USD |
1,328.23 | 1,274.41 | 1,346.80 | 1,289.40 | ||||||||||||
| JPY |
8.96 | 9.64 | 8.89 | 9.13 | ||||||||||||
| ii) | Sensitivity analysis |
A weaker won, as indicated below, against the following currencies which comprise the Company’s assets or liabilities denominated in a foreign currency as of March 31, 2024 and December 31, 2023, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Company considers to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, would remain constant. The changes in equity and profit or loss would have been as follows:
| (In millions of won) | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Equity | Profit or loss |
Equity | Profit or loss |
|||||||||||||
| USD (5 percent weakening) |
(223,305 | ) | (193,758 | ) | ||||||||||||
| JPY (5 percent weakening) |
(5,187 | ) | (5,187 | ) | (5,925 | ) | (5,925 | ) | ||||||||
A stronger won against the above currencies as of March 31, 2024 and December 31, 2023 would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
| iii) | Fair value hedging derivatives |
In relation to advances received that are dominated in foreign currency, the Company uses derivative instruments to hedge change of fair value
due to foreign currency exchange rate changes. As of March 31, 2024, there is no ineffective portion of the gain or loss on valuation of derivatives to which change of fair value hedging accounting has been applied and gain on valuation
amounting to W71,125 million, respectively, (contracted buying amount: USD 1,200 million, contracted exchange rate: W1,289.11~1,310.08) are recognized in profit or loss.
35
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| (ii) | Interest rate risk |
Interest rate risk arises principally from the Company’s variable interest-bearing bonds and borrowings. The Company establishes and
applies its policy to reduce uncertainty arising from fluctuations in interest rates and to minimize finance cost and manages interest rate risk by monitoring of trends of fluctuations in interest rate and establishing plan for countermeasures.
Meanwhile, the Company entered into cross currency interest rate swap contracts amounting to USD 1,293 million (W1,740,739 million) and interest rate swap contracts amounting to W970,000 million in
notional amount to manage interest rate risk with respect to variable interest bearing borrowings.
| i) | Profile |
The interest rate profile of the Company’s interest-bearing financial instruments as of March 31, 2024 and December 31, 2023 is as follows:
| (In millions of won) | ||||||||
| March 31, 2024 |
December 31, 2023 |
|||||||
| Fixed rate instruments |
||||||||
| Financial assets |
354,502 | |||||||
| Financial liabilities |
(5,899,995 | ) | (6,156,590 | ) | ||||
|
|
|
|
|
|||||
| Total |
(5,802,088 | ) | ||||||
|
|
|
|
|
|||||
| Variable rate instruments |
||||||||
| Financial liabilities |
(3,545,515 | ) | ||||||
| ii) | Equity and profit or loss sensitivity analysis for variable rate instruments |
As of March 31, 2024 and December 31, 2023, a change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below for the respective following 12 month periods. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
| (In millions of won) | ||||||||||||||||
| Equity | Profit or loss | |||||||||||||||
| 1%p increase |
1%p decrease |
1%p increase |
1%p decrease |
|||||||||||||
| March 31, 2024 |
||||||||||||||||
| Variable rate instruments (*) |
33,892 | (33,892 | ) | 33,892 | ||||||||||||
| December 31, 2023 |
||||||||||||||||
| Variable rate instruments (*) |
27,329 | (27,329 | ) | 27,329 | ||||||||||||
| (*) | Financial instruments related to non-hedging interest rate swap are included in the calculation. |
36
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| (b) | Credit risk |
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers.
The Company’s exposure to credit risk of trade and other receivables is influenced mainly by the individual characteristics of each customer. However, management believes that the default risk of the country in which each customer operates, do not have a significant influence on credit risk since the majority of the customers are global electronic appliance manufacturers operating in global markets.
The Company establishes credit limits for each customer and each new customer is analyzed quantitatively and qualitatively before determining whether to utilize third party guarantees, insurance or factoring as appropriate.
In relation to the impairment of financial assets subsequent to initial recognition, the Company recognizes the changes in expected credit loss (“ECL”) in profit or loss at each reporting date.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | ||||||||
| March 31, 2024 |
December 31, 2023 |
|||||||
| Financial assets at amortized cost |
||||||||
| Cash equivalents |
334,502 | |||||||
| Deposits in banks |
20,011 | 20,011 | ||||||
| Trade accounts and notes receivable, net |
2,953,654 | 3,077,901 | ||||||
| Non-trade receivables |
89,823 | 108,769 | ||||||
| Accrued income |
322 | 242 | ||||||
| Deposits |
9,483 | 8,538 | ||||||
| Loans |
55,693 | 59,884 | ||||||
|
|
|
|
|
|||||
| Subtotal |
3,609,847 | |||||||
|
|
|
|
|
|||||
| Financial assets at fair value through profit or loss |
||||||||
| Convertible securities |
1,838 | |||||||
| Derivatives |
191,374 | 169,703 | ||||||
|
|
|
|
|
|||||
| Subtotal |
171,541 | |||||||
|
|
|
|
|
|||||
| Financial assets effective for fair value hedging |
||||||||
| Derivatives |
35,398 | — | ||||||
|
|
|
|
|
|||||
| Subtotal |
— | |||||||
|
|
|
|
|
|||||
| Total |
3,781,388 | |||||||
|
|
|
|
|
|||||
37
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
In addition to the financial assets above, as of March 31, 2024, the Company provides
payment guarantees to LG Display Vietnam Haiphong, Co., Ltd. in connection with the principal amount of credit facilities amounting to USD 1,402 million (W1,888,513 million) (see note 15).
Trade accounts and notes receivable are insured in order for the Company to manage credit risk if they do not meet the Company’s internal credit ratings. Uninsured trade accounts and notes receivable are managed by continuous monitoring of internal credit rating standards established by the Company and seeking insurance coverage, if necessary.
| (c) | Liquidity risk |
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
The Company has historically been able to satisfy its cash requirements from cash flows from operations and debt and equity financing. To the extent that the Company does not generate sufficient cash flows from operations to meet its capital requirements, the Company may rely on other financing activities, such as long-term borrowings and offerings of debt instruments, equity-linked and other debt instruments. In addition, the Company maintains a line of credit with various banks.
38
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
The following are the contractual maturities of financial liabilities, including estimated interest payments, as of March 31, 2024.
| (In millions of won) | Contractual cash flows in | |||||||||||||||||||||||||||
| Carrying amount |
Total | 6 months or less |
6-12 months |
1-2 years |
2-5 years |
More than 5 years |
||||||||||||||||||||||
| Non-derivative financial liabilities |
||||||||||||||||||||||||||||
| Borrowings |
9,662,125 | 2,197,144 | 2,217,231 | 3,379,534 | 1,816,251 | 51,965 | ||||||||||||||||||||||
| Bonds |
1,414,290 | 1,508,377 | 320,835 | 639,511 | 68,419 | 479,612 | — | |||||||||||||||||||||
| Trade accounts and notes payable |
9,677,364 | 9,677,364 | 9,542,837 | 134,527 | — | — | — | |||||||||||||||||||||
| Other accounts payable |
1,199,121 | 1,201,380 | 1,109,808 | 91,572 | — | — | — | |||||||||||||||||||||
| Other accounts payable (enterprise procurement cards) (*1) |
370,497 | 370,497 | 370,497 | — | — | — | — | |||||||||||||||||||||
| Long-term other accounts payable |
341,773 | 394,633 | — | — | 105,071 | 176,431 | 113,131 | |||||||||||||||||||||
| Payment guarantee (*2) |
19,664 | 2,171,054 | 2,171,054 | — | — | — | — | |||||||||||||||||||||
| Security deposits received |
153,640 | 188,541 | 2,860 | 1,430 | 2,690 | 181,561 | — | |||||||||||||||||||||
| Lease liabilities |
14,796 | 15,429 | 7,215 | 4,420 | 2,613 | 1,019 | 162 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Derivative financial liabilities |
||||||||||||||||||||||||||||
| Derivatives |
(1,666 | ) | 4,562 | 2,216 | (211 | ) | (8,233 | ) | — | |||||||||||||||||||
| Fair value hedging derivatives |
324 | 324 | — | — | 324 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
25,188,058 | 15,726,812 | 3,090,907 | 3,558,440 | 2,646,641 | 165,258 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (*1) | Represents liabilities payable to credit card companies for utility expenses and others paid using enterprise procurement cards. The Company presented the payable to credit card companies as other accounts payable and disclosed related cash flows as operating activities since the Company is using the enterprise procurement cards through agreements with suppliers for transactions arising from purchasing of goods and services, the payment term is within a year from the purchase, as part of the normal operating cycle, and no collateral is provided. |
Change in liabilities related to procurement cards for the three-month period ended March 31, 2024 is as follows:
| (In millions of won) | ||||||||||||
| January 1, 2024 |
Change (Cash flows from operating activities) |
March 31, 2024 |
||||||||||
| Other accounts payable (enterprise procurement cards) |
(721,683 | ) | 370,497 | |||||||||
| (*2) | Contractual cash flows of payment guarantee represents the maximum amount to the earliest period that the Company could be required to pay the guarantee amount. |
39
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
The following are the contractual maturities of financial liabilities, including estimated interest payments, as of December 31, 2023.
| (In millions of won) | Contractual cash flows in | |||||||||||||||||||||||||||
| Carrying amount |
Total | 6 months or less |
6-12 months |
1-2 years |
2-5 years |
More than 5 years |
||||||||||||||||||||||
| Non-derivative financial liabilities |
||||||||||||||||||||||||||||
| Borrowings |
8,868,714 | 2,482,724 | 1,313,880 | 3,351,277 | 1,720,833 | — | ||||||||||||||||||||||
| Bonds |
1,488,143 | 1,597,741 | 111,169 | 319,011 | 642,996 | 524,565 | — | |||||||||||||||||||||
| Trade accounts and notes payable |
8,993,964 | 8,993,964 | 8,788,397 | 205,567 | — | — | — | |||||||||||||||||||||
| Other accounts payable |
1,242,109 | 1,244,637 | 1,178,845 | 65,792 | — | — | — | |||||||||||||||||||||
| Other accounts payable (enterprise procurement cards) (*1) |
1,092,180 | 1,092,180 | 938,899 | 153,281 | — | — | — | |||||||||||||||||||||
| Long-term other accounts payable |
343,845 | 398,451 | — | — | 114,783 | 175,358 | 108,310 | |||||||||||||||||||||
| Payment guarantee (*2) |
20,613 | 2,182,973 | 2,182,973 | — | — | — | — | |||||||||||||||||||||
| Security deposits received |
153,316 | 190,275 | 3,120 | 4,550 | 1,040 | 181,565 | — | |||||||||||||||||||||
| Lease liabilities |
14,400 | 15,014 | 6,145 | 5,953 | 1,838 | 916 | 162 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Derivative financial liabilities |
||||||||||||||||||||||||||||
| Derivatives |
45,705 | 18,781 | 3,988 | 12,474 | 10,462 | — | ||||||||||||||||||||||
| Fair value hedging derivatives |
36,052 | 36,052 | 1,514 | 5,878 | 20,282 | 8,378 | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
24,665,706 | 15,712,567 | 2,077,900 | 4,144,690 | 2,622,077 | 108,472 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (*1) | Represents liabilities payable to credit card companies for purchase of raw material and others paid using enterprise procurement cards. The Company presented the payable to credit card companies as other accounts payable and disclosed related cash flows as operating activities since the Company is using the enterprise procurement cards through agreements with suppliers for transactions arising from purchasing of goods and services, the payment term is within a year from the purchase, as part of the normal operating cycle, and no collateral is provided. |
Change in liabilities related to procurement cards for the year ended December 31, 2023 is as follows:
| (In millions of won) | ||||||||||||
| January 1, 2023 |
Change (Cash flows from operation activities) |
December 31, 2023 |
||||||||||
| Other accounts payable (enterprise procurement cards) |
156,441 | 1,092,180 | ||||||||||
| (*2) | Contractual cash flows of payment guarantee represents the maximum amount to the earliest period that the Company could be required to pay the guarantee amount. |
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
40
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| (d) | Capital management |
Management’s policy is to maintain a capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Liabilities to equity ratio, net borrowings to equity ratio and other financial ratios are used by management to achieve an optimal capital structure. Management also monitors the return on capital as well as the level of dividends to ordinary shareholders.
| (In millions of won) | ||||||||
| March 31, 2024 |
December 31, 2023 |
|||||||
| Total liabilities |
24,050,857 | |||||||
| Total equity |
6,083,135 | 5,681,555 | ||||||
| Cash and deposits in banks (*1) |
119,019 | 354,502 | ||||||
| Borrowings (including bonds) |
10,296,965 | 9,702,105 | ||||||
| Total liabilities to equity ratio |
402% | 423% | ||||||
| Net borrowings to equity ratio (*2) |
167% | 165% | ||||||
| (*1) | Cash and deposits in banks consist of cash and cash equivalents and current deposits in banks. |
| (*2) | Net borrowings to equity ratio is calculated by dividing total borrowings (including bonds and excluding lease liabilities and others) less cash and current deposits in banks by total equity. |
41
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| (e) | Determination of fair value |
| (i) | Measurement of fair value |
A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
| i) | Current assets and liabilities |
The carrying amounts approximate their fair value because of the short maturity of these instruments.
| ii) | Trade receivables and other receivables |
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. The carrying amounts of current receivables approximate their fair value.
| iii) | Investments in equity and debt securities |
The fair value of marketable financial assets at FVTPL and FVOCI is determined by reference to their quoted closing bid price at the reporting date. The fair value of non-marketable instruments is determined using the results of fair value assessment performed by external valuation institutions and others.
| iv) | Non-derivative financial liabilities |
Fair value, which is determined for disclosure purposes, except for the liabilities at FVTPL, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.
| v) | Derivatives |
The inputs used to measure the fair value of currency forward and cross currency interest rate swap are calculated based on the exchange rates and interest rates observable in the market at the reporting date.
42
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| (ii) | Fair values versus carrying amounts |
The fair values of financial assets and liabilities, together with the carrying amounts shown in the condensed separate interim statements of financial position as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Carrying amounts |
Fair values |
Carrying amounts |
Fair values |
|||||||||||||
| Financial assets at amortized cost |
||||||||||||||||
| Cash and cash equivalents |
(*1) | 334,502 | (*1) | |||||||||||||
| Deposits in banks |
20,011 | (*1) | 20,011 | (*1) | ||||||||||||
| Trade accounts and notes receivable |
2,953,654 | (*1) | 3,077,901 | (*1) | ||||||||||||
| Non-trade receivables |
89,823 | (*1) | 108,769 | (*1) | ||||||||||||
| Accrued income |
322 | (*1) | 242 | (*1) | ||||||||||||
| Deposits |
9,483 | (*1) | 8,538 | (*1) | ||||||||||||
| Loans |
55,693 | (*1) | 59,884 | (*1) | ||||||||||||
| Financial assets at fair value through profit or loss |
||||||||||||||||
| Equity securities |
3,967 | 3,967 | 3,967 | |||||||||||||
| Convertible securities |
1,838 | 1,838 | 1,838 | 1,838 | ||||||||||||
| Derivatives |
191,374 | 191,374 | 169,703 | 169,703 | ||||||||||||
| Financial assets effective for fair value hedging |
||||||||||||||||
| Derivatives |
35,398 | — | — | |||||||||||||
| Financial liabilities at fair value through profit or loss |
||||||||||||||||
| Derivatives |
26,120 | 63,526 | 63,526 | |||||||||||||
| Financial liabilities effective for fair value hedging |
||||||||||||||||
| Derivatives |
324 | 36,052 | 36,052 | |||||||||||||
| Financial liabilities at amortized cost |
||||||||||||||||
| Borrowings |
8,945,968 | 8,213,962 | 8,248,441 | |||||||||||||
| Bonds |
1,414,290 | 1,412,362 | 1,488,143 | 1,479,725 | ||||||||||||
| Trade accounts and notes payable |
9,677,364 | (*1) | 8,993,964 | (*1) | ||||||||||||
| Other accounts payable |
1,911,391 | (*1) | 2,678,134 | (*1) | ||||||||||||
| Payment guarantee liabilities |
19,664 | (*1) | 20,613 | (*1) | ||||||||||||
| Security deposits received |
153,640 | (*1) | 153,316 | (*1) | ||||||||||||
| Other financial liabilities |
||||||||||||||||
| Lease liabilities |
(*2) | 14,400 | (*2) | |||||||||||||
| (*1) | Excluded from disclosures as the carrying amount approximates fair value. |
| (*2) | Excluded from the fair value disclosures in accordance with Korean IFRS 1107 ‘Financial Instruments: Disclosures’. |
43
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| (iii) | Fair values of financial assets and liabilities |
| i) | Fair value hierarchy |
Financial instruments carried at fair value are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques. The different levels have been defined as follows:
| • | Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities |
| • | Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly |
| • | Level 3: inputs for the asset or liability that are not based on observable market data |
| ii) | Valuation techniques and inputs for Assets and Liabilities measured by the fair value hierarchy |
Fair value hierarchy classifications of the financial instruments that are measured at fair value as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | Valuation technique |
Input | |||||||||||||
| Classification |
Level 1 | Level 2 | Level 3 | |||||||||||||
| Financial assets at fair value through profit or loss |
||||||||||||||||
| Equity securities |
— | 3,967 | Discounted cash flow, etc. |
Discount rate and Estimated cash flow, etc. | ||||||||||||
| Convertible securities |
— | — | 1,838 | Blended discount model and binominal option pricing model |
Discount rate, stock price and volatility | |||||||||||
| Derivatives |
— | 191,374 | — | Discounted cash flow | Discount rate and Exchange rate | |||||||||||
| Financial assets effective for fair value hedging |
||||||||||||||||
| Derivatives |
— | 35,398 | — | Discounted cash flow | Discount rate and Exchange rate | |||||||||||
| Financial liabilities at fair value through profit or loss |
||||||||||||||||
| Derivatives |
26,120 | — | Discounted cash flow | Discount rate and Exchange rate | ||||||||||||
| Financial liabilities effective for fair value hedging |
||||||||||||||||
| Derivatives |
— | 324 | — | Discounted cash flow | Discount rate and Exchange rate | |||||||||||
44
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| (In millions of won) |
December 31, 2023 | Valuation technique |
Input | |||||||||||||
| Classification |
Level 1 | Level 2 | Level 3 | |||||||||||||
| Financial assets at fair value through profit or loss |
||||||||||||||||
| Equity securities |
— | 3,967 | Discounted cash flow, etc. |
Discount rate and Estimated cash flow, etc. | ||||||||||||
| Convertible securities |
— | — | 1,838 | Blended discount model and binominal option pricing model |
Discount rate, stock price and volatility | |||||||||||
| Derivatives |
— | 169,703 | — | Discounted cash flow | Discount rate and Exchange rate | |||||||||||
| Financial liabilities at fair value through profit or loss |
||||||||||||||||
| Derivatives |
63,526 | — | Discounted cash flow | Discount rate and Exchange rate | ||||||||||||
| Financial liabilities effective for fair value hedging |
||||||||||||||||
| Derivatives |
— | 36,052 | — | Discounted cash flow | Discount rate and Exchange rate | |||||||||||
45
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 24. | Financial Risk Management, Continued |
| iii) | Financial instruments not measured at fair value but for which the fair value is disclosed |
Fair value hierarchy classifications, valuation technique and inputs for fair value measurements of the financial instruments not measured at fair value but for which the fair value is disclosed as of March 31, 2024 and December 31, 2023 are as follows:
| (In millions of won) | March 31, 2024 | Valuation technique | Input | |||||||||||||||||
| Classification |
Level 1 | Level 2 | Level 3 | |||||||||||||||||
| Liabilities |
|
|||||||||||||||||||
| Borrowings |
— | 8,945,968 | Discounted cash flow | Discount rate | ||||||||||||||||
| Bonds |
— | — | 1,412,362 | Discounted cash flow | Discount rate | |||||||||||||||
| (In millions of won) | December 31, 2023 | Valuation technique | Input | |||||||||||||||||
| Classification |
Level 1 | Level 2 | Level 3 | |||||||||||||||||
| Liabilities |
|
|||||||||||||||||||
| Borrowings |
— | 8,248,441 | Discounted cash flow | Discount rate | ||||||||||||||||
| Bonds |
— | — | 1,479,725 | Discounted cash flow | Discount rate | |||||||||||||||
| iv) | The interest rates applied for determination of the above fair value as of March 31, 2024 and December 31, 2023 are as follows: |
| March 31, 2024 |
December 31, 2023 |
|||||||
| Borrowings, bonds and others |
4.20%~4.84% | 4.60%~5.02% | ||||||
| v) | There is no transfer between Level 1, Level 2 and Level 3 for the three-month periods ended March 31, 2024 and 2023, and the changes in financial assets classified as Level 3 of fair value measurements for the three-month periods ended March 31, 2024 and 2023 is as follows: |
| (In millions of won) Classification |
January 1, 2024 |
Valuation | March 31, 2024 |
|||||||||
| Equity securities |
— | 3,967 | ||||||||||
| Convertible securities |
1,838 | — | 1,838 | |||||||||
| (In millions of won) Classification |
January 1, 2023 |
Valuation | March 31, 2023 |
|||||||||
| Equity securities |
(7,776 | ) | 2,708 | |||||||||
| Convertible securities |
1,797 | — | 1,797 | |||||||||
46
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Cash flow information |
| (a) | The breakdown of the cash generated from the operation for the three-month periods ended March 31, 2024 and 2023 is as follows: |
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Loss for the period |
(1,405,754 | ) | ||||||
|
|
|
|
|
|||||
| Adjustments for: |
||||||||
| Income tax benefit (Note 22) |
(418,006 | ) | ||||||
| Depreciation and amortization (Note 18) |
775,233 | 543,781 | ||||||
| Gain on foreign currency translation |
(122,843 | ) | (55,420 | ) | ||||
| Loss on foreign currency translation |
328,099 | 229,994 | ||||||
| Expenses related to defined benefit plans (Note 13) |
33,401 | 36,884 | ||||||
| Gain on disposal of property, plant and equipment |
(5,253 | ) | (15,717 | ) | ||||
| Loss on disposal of property, plant and equipment |
16,791 | 32,998 | ||||||
| Impairment loss on property, plant and equipment |
66,789 | 3,698 | ||||||
| Loss on disposal of intangible assets |
193 | 4 | ||||||
| Impairment loss on intangible assets |
49,996 | 2,429 | ||||||
| Reversal of impairment loss on intangible assets |
— | (122 | ) | |||||
| Expense on increase (decrease) of provisions |
(2,289 | ) | 5,647 | |||||
| Finance income |
(151,682 | ) | (330,297 | ) | ||||
| Finance costs |
288,842 | 405,005 | ||||||
| Other |
(6,494 | ) | (46 | ) | ||||
|
|
|
|
|
|||||
| Changes in: |
||||||||
| Trade accounts and notes receivable |
465,064 | |||||||
| Other accounts receivable |
27,953 | (36,659 | ) | |||||
| Inventories |
(487,711 | ) | (8,237 | ) | ||||
| Other current assets |
(70,231 | ) | 1,619 | |||||
| Other non-current assets |
(9,101 | ) | (11,075 | ) | ||||
| Trade accounts and notes payable |
470,857 | 85,154 | ||||||
| Other accounts payable |
(473,032 | ) | (523,117 | ) | ||||
| Accrued expenses |
(42,842 | ) | (101,489 | ) | ||||
| Provisions |
(25,919 | ) | (33,779 | ) | ||||
| Advances received |
(50,585 | ) | (15,281 | ) | ||||
| Other current liabilities |
(21,808 | ) | (18,082 | ) | ||||
| Defined benefit liabilities, net |
(2,635 | ) | (16,546 | ) | ||||
| Long-term advances received |
— | 558,699 | ||||||
| Other non-current liabilities |
896 | 2,741 | ||||||
|
|
|
|
|
|||||
| Cash used in operations |
(615,910 | ) | ||||||
|
|
|
|
|
|||||
47
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 25. | Cash flow information, Continued |
| (b) | Changes in liabilities arising from financing activities for the three-month periods ended March 31, 2024 and 2023 are as follows: |
| (In millions of won) | ||||||||||||||||||||||||
| January 1, 2024 |
Cash flows from financing activities |
Non-cash transactions | ||||||||||||||||||||||
| Gain or loss on foreign currency translation |
Interest expense |
Others | March 31, 2024 |
|||||||||||||||||||||
| Short-term borrowings |
404,146 | 34,314 | — | — | 1,866,673 | |||||||||||||||||||
| Payment guarantee liabilities |
20,613 | 1,918 | — | — | (2,867 | ) | 19,664 | |||||||||||||||||
| Long-term borrowings |
6,785,749 | 128,320 | 100,835 | 1,098 | — | 7,016,002 | ||||||||||||||||||
| Bonds |
1,488,143 | (80,000 | ) | 5,713 | 434 | — | 1,414,290 | |||||||||||||||||
| Lease liabilities |
14,400 | (3,474 | ) | — | — | 3,870 | 14,796 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
450,910 | 140,862 | 1,532 | 1,003 | 10,331,425 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (In millions of won) | ||||||||||||||||||||||||
| January 1, 2023 |
Cash flows from financing activities |
Non-cash transactions | ||||||||||||||||||||||
| Gain or loss on foreign currency translation |
Interest expense |
Others | March 31, 2023 |
|||||||||||||||||||||
| Short-term borrowings |
262,177 | 18,734 | — | — | 2,233,200 | |||||||||||||||||||
| Payment guarantee liabilities |
19,241 | 1,633 | — | — | (1 | ) | 20,873 | |||||||||||||||||
| Long-term borrowings |
5,660,105 | 880,780 | 76,284 | 686 | 2,866 | 6,620,721 | ||||||||||||||||||
| Bonds |
1,448,746 | 146,160 | 3,650 | 412 | — | 1,598,968 | ||||||||||||||||||
| Lease liabilities |
5,952 | (3,191 | ) | — | — | 10,307 | 13,068 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
1,287,559 | 98,668 | 1,098 | 13,172 | 10,486,830 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
48
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others |
| (a) | Related parties |
Related parties as of March 31, 2024 are as follows:
| Classification |
Description | |
| Subsidiaries(*) |
LG Display America, Inc. and others | |
| Associates(*) |
Paju Electric Glass Co., Ltd. and others | |
| Entity that has significant influence over the Company |
LG Electronics Inc. | |
| Subsidiaries of the entity that has significant influence over the Company |
Subsidiaries of LG Electronics Inc. | |
| (*) | Details of subsidiaries and associates are described in Note 8. |
49
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
(b) Major transactions with related parties for the periods ended March 31, 2024 and 2023 are as follows :
| (In millions of won) | 2024 | |||||||||||||||||||||||
| Sales and others |
Dividend income |
Purchase and others | ||||||||||||||||||||||
| Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | |||||||||||||||||||||
| Subsidiaries |
||||||||||||||||||||||||
| LG Display America, Inc. |
— | — | — | — | 17 | |||||||||||||||||||
| LG Display Japan Co., Ltd. |
170,310 | — | — | — | — | 108 | ||||||||||||||||||
| LG Display Germany GmbH |
337,935 | — | — | — | — | 13,186 | ||||||||||||||||||
| LG Display Taiwan Co., Ltd. |
536,291 | — | — | — | — | 320 | ||||||||||||||||||
| LG Display Nanjing Co., Ltd. |
25,500 | — | 623 | — | 395,636 | 1,862 | ||||||||||||||||||
| LG Display Shanghai Co., Ltd. |
144,099 | — | — | — | — | — | ||||||||||||||||||
| LG Display Guangzhou Co., Ltd. |
5,101 | — | 5,677 | — | 278,443 | 4,155 | ||||||||||||||||||
| LG Display Shenzhen Co., Ltd. |
130,068 | — | — | — | — | — | ||||||||||||||||||
| LG Display Yantai Co., Ltd. |
— | — | 5,460 | — | 47,036 | 321 | ||||||||||||||||||
| LG Display (China) Co., Ltd. |
269 | — | 292,354 | — | — | 912 | ||||||||||||||||||
| LG Display Singapore Pte. Ltd. |
352,880 | — | — | — | — | 1,804 | ||||||||||||||||||
| L&T Display Technology (Fujian) Limited |
30,365 | — | — | — | — | 12 | ||||||||||||||||||
| Nanumnuri Co., Ltd. |
68 | 470 | — | — | — | 6,190 | ||||||||||||||||||
| LG Display Guangzhou Trading Co., Ltd. |
94,404 | — | — | — | — | — | ||||||||||||||||||
| LG Display Vietnam Haiphong Co., Ltd. |
43,035 | — | 23,913 | — | 718,128 | 7,615 | ||||||||||||||||||
| Suzhou Lehui Display Co., Ltd. |
31,931 | — | — | — | 1,828 | — | ||||||||||||||||||
| LG Display High-Tech (China) Co., Ltd. |
198 | — | 331 | — | 573,420 | 446 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
470 | 328,358 | — | 2,014,491 | 36,948 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
50
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (In millions of won) | 2024 | |||||||||||||||||||||||
| Purchase and others | ||||||||||||||||||||||||
| Sales and Others |
Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | |||||||||||||||||||
| Associates |
||||||||||||||||||||||||
| WooRee E&L Co., Ltd. |
— | 193 | — | — | — | |||||||||||||||||||
| AVATEC Co., Ltd. |
— | 200 | 91 | — | 20,861 | 2,287 | ||||||||||||||||||
| Paju Electric Glass Co., Ltd. |
— | — | 61,494 | — | — | 1,958 | ||||||||||||||||||
| YAS Co., Ltd. |
— | — | 2,309 | 1,160 | — | 1,885 | ||||||||||||||||||
| Material Science Co., Ltd. |
— | — | — | — | — | 247 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
200 | 64,087 | 1,160 | 20,861 | 6,377 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Entity that has significant influence over the Company |
||||||||||||||||||||||||
| LG Electronics Inc. |
— | 3,425 | 18,489 | — | 36,740 | |||||||||||||||||||
51
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (In millions of won) | 2024 | |||||||||||||||||||||||
| Purchase and others | ||||||||||||||||||||||||
| Sales and others |
Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | |||||||||||||||||||
| Subsidiaries of the entity that has significant influence over the Company |
||||||||||||||||||||||||
| LG Electronics India Pvt. Ltd. |
— | — | — | — | 130 | |||||||||||||||||||
| LG Electronics Vietnam Haiphong Co., Ltd. |
42,883 | — | — | — | — | 2,855 | ||||||||||||||||||
| LG Electronics Reynosa S.A. DE C.V. |
6,834 | — | — | — | — | 283 | ||||||||||||||||||
| LG Electronics U.S.A., Inc. |
— | — | — | — | — | 514 | ||||||||||||||||||
| LG Electronics Egypt S.A.E |
2,813 | — | — | — | — | 5 | ||||||||||||||||||
| LG Innotek Co., Ltd. |
2,430 | — | 1 | — | — | 20,966 | ||||||||||||||||||
| P.T. LG Electronics Indonesia |
6,864 | — | — | — | — | 373 | ||||||||||||||||||
| Others |
4,807 | — | — | — | — | 8,621 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
— | 1 | — | — | 33,747 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
670 | 395,871 | 19,649 | 2,035,352 | 113,812 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
52
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (In millions of won) | 2023 | |||||||||||||||||||||||
| Purchase and others | ||||||||||||||||||||||||
| Sales and others |
Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | |||||||||||||||||||
| Subsidiaries |
||||||||||||||||||||||||
| LG Display America, Inc. |
— | — | — | — | 4 | |||||||||||||||||||
| LG Display Japan Co., Ltd. |
148,873 | — | — | — | — | 61 | ||||||||||||||||||
| LG Display Germany GmbH |
219,704 | — | — | — | — | 29,164 | ||||||||||||||||||
| LG Display Taiwan Co., Ltd. |
296,281 | — | — | — | — | 396 | ||||||||||||||||||
| LG Display Nanjing Co., Ltd. |
26,398 | — | 1,178 | — | 376,805 | 5,623 | ||||||||||||||||||
| LG Display Shanghai Co., Ltd. |
108,973 | — | — | — | — | — | ||||||||||||||||||
| LG Display Guangzhou Co., Ltd. |
8,535 | — | 6,624 | — | 311,093 | 3,642 | ||||||||||||||||||
| LG Display Shenzhen Co., Ltd. |
66,895 | — | — | — | — | — | ||||||||||||||||||
| LG Display Yantai Co., Ltd. |
2 | — | 4,151 | — | 24,072 | 494 | ||||||||||||||||||
| LG Display (China) Co., Ltd. |
141 | — | 337,705 | — | — | 396 | ||||||||||||||||||
| LG Display Singapore Pte. Ltd. |
195,037 | — | — | — | — | 25 | ||||||||||||||||||
| L&T Display Technology (Fujian) Limited |
23,097 | — | 4 | — | — | 47 | ||||||||||||||||||
| Nanumnuri Co., Ltd. |
59 | — | — | — | — | 6,181 | ||||||||||||||||||
| LG Display Guangzhou Trading Co., Ltd. |
88,784 | — | — | — | — | — | ||||||||||||||||||
| LG Display Vietnam Haiphong Co., Ltd. |
5,167 | — | 10,144 | — | 648,741 | 6,473 | ||||||||||||||||||
| Suzhou Lehui Display Co., Ltd. |
18,154 | — | 6,800 | — | 4,457 | 15 | ||||||||||||||||||
| LG Display High-Tech (China) Co., Ltd. |
3,137 | — | 827 | — | 649,552 | 802 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
— | 367,433 | — | 2,014,720 | 53,323 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
53
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (In millions of won) | 2023 | |||||||||||||||||||||||
| Purchase and others | ||||||||||||||||||||||||
| Sales and others |
Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | |||||||||||||||||||
| Associates |
||||||||||||||||||||||||
| WooRee E&L Co., Ltd. |
— | 71 | — | — | — | |||||||||||||||||||
| AVATEC Co., Ltd. |
— | — | 126 | — | 8,926 | 999 | ||||||||||||||||||
| Paju Electric Glass Co., Ltd. |
— | 15,200 | 29,539 | — | — | 584 | ||||||||||||||||||
| YAS Co., Ltd. |
— | — | 1,723 | 6,960 | — | 1,200 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
15,200 | 31,459 | 6,960 | 8,926 | 2,783 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Entity that has significant influence over the Company |
||||||||||||||||||||||||
| LG Electronics Inc. |
— | 2,332 | 16,233 | — | 28,755 | |||||||||||||||||||
54
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (In millions of won) | 2023 | |||||||||||||||||||||||
| Purchase and others | ||||||||||||||||||||||||
| Sales and others |
Dividend income |
Purchase of raw material and others |
Acquisition of property, plant and equipment |
Outsourcing expense |
Others | |||||||||||||||||||
| Subsidiaries of the entity that has significant influence over the Company |
||||||||||||||||||||||||
| LG Electronics India Pvt. Ltd. |
— | — | — | — | 73 | |||||||||||||||||||
| LG Electronics Vietnam Haiphong Co., Ltd. |
140,929 | — | — | — | — | 204 | ||||||||||||||||||
| LG Electronics Reynosa S.A. DE C.V. |
7,300 | — | — | — | — | 268 | ||||||||||||||||||
| LG Electronics U.S.A., Inc. |
— | — | — | — | — | 521 | ||||||||||||||||||
| LG Electronics Egypt S.A.E |
5,303 | — | — | — | — | 12 | ||||||||||||||||||
| LG Innotek Co., Ltd. |
1,628 | — | 10 | — | — | 21,002 | ||||||||||||||||||
| P.T. LG Electronics Indonesia |
5,896 | — | — | — | — | 797 | ||||||||||||||||||
| Others |
5,171 | — | — | — | — | 4,190 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Subtotal |
— | 10 | — | — | 27,067 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
15,200 | 401,234 | 23,193 | 2,023,646 | 111,928 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
55
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
(c) Balances of receivables and payables from transaction with related parties as at March 31, 2024 and December 31, 2023 are as follows :
| (In millions of won) | ||||||||||||||||
| Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||||
| March 31, 2024 |
December 31, 2023 |
March 31, 2024 |
December 31, 2023 |
|||||||||||||
| Subsidiaries |
||||||||||||||||
| LG Display America, Inc. |
1,817,773 | 24 | 4 | |||||||||||||
| LG Display Japan Co., Ltd. |
174,697 | 134,107 | 100 | 26 | ||||||||||||
| LG Display Germany GmbH |
128,952 | 50,322 | 12,885 | 3,234 | ||||||||||||
| LG Display Taiwan Co., Ltd. |
220,077 | 60,663 | 137 | 96 | ||||||||||||
| LG Display Nanjing Co., Ltd. |
3,447 | 2,869 | 1,805,535 | 1,796,033 | ||||||||||||
| LG Display Shanghai Co., Ltd. |
321,363 | 241,039 | 3 | — | ||||||||||||
| LG Display Guangzhou Co., Ltd. |
756 | 205 | 1,588,534 | 1,241,145 | ||||||||||||
| LG Display Guangzhou Trading Co., Ltd. |
55,706 | 287,296 | — | — | ||||||||||||
| LG Display Shenzhen Co., Ltd. |
104,891 | 75,709 | — | — | ||||||||||||
| LG Display Yantai Co., Ltd. |
— | 1 | 134,028 | 228,364 | ||||||||||||
| LG Display (China) Co., Ltd. |
2,944 | 2,452 | 606,354 | 451,003 | ||||||||||||
| LG Display Singapore Pte. Ltd. |
101,173 | 24,171 | 446,232 | 3 | ||||||||||||
| L&T Display Technology (Fujian) Limited |
18,736 | 24,690 | 139,184 | 103,501 | ||||||||||||
| Nanumnuri Co., Ltd. |
— | — | 2,351 | 2,316 | ||||||||||||
| LG Display Vietnam Haiphong Co., Ltd. |
23,489 | 23,402 | 792,316 | 1,180,951 | ||||||||||||
| Suzhou Lehui Display Co., Ltd. |
9,399 | 24,829 | 1,314 | 2,532 | ||||||||||||
| LG Display High-Tech (China) Co., Ltd. |
16,083 | 34,268 | 2,252,138 | 1,730,516 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Subtotal |
2,803,796 | 7,781,135 | 6,739,724 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
56
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (In millions of won) | ||||||||||||||||
| Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||||
| March 31, 2024 |
December 31, 2023 |
March 31, 2024 |
December 31, 2023 |
|||||||||||||
| Associates |
||||||||||||||||
| WooRee E&L Co., Ltd. |
695 | 139 | 645 | |||||||||||||
| AVATEC Co., Ltd. |
200 | — | 6,345 | 4,775 | ||||||||||||
| Paju Electric Glass Co., Ltd. |
— | — | 64,334 | 56,136 | ||||||||||||
| YAS Co., Ltd. |
— | — | 5,890 | 7,875 | ||||||||||||
| Material Science Co., Ltd. |
— | — | 267 | 118 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Subtotal |
695 | 76,975 | 69,549 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Entity that has significant influence over the Company |
||||||||||||||||
| LG Electronics Inc. (*1) |
62,027 | 1,057,625 | 1,044,258 | |||||||||||||
57
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (In millions of won) | ||||||||||||||||
| Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||||
| March 31, 2024 |
December 31, 2023 |
March 31, 2024 |
December 31, 2023 |
|||||||||||||
| Subsidiaries of the entity that has significant influence over the Company |
||||||||||||||||
| LG Innotek Co., Ltd. (*2) |
2,521 | 214,870 | 211,476 | |||||||||||||
| LG Electronics Reynosa S.A. DE C.V |
4,270 | 3,814 | 63 | 109 | ||||||||||||
| LG Electronics India Pvt. Ltd. |
4,376 | 2,013 | — | 35 | ||||||||||||
| LG Electronics Vietnam Haiphong Co., Ltd. |
21,485 | 76,952 | 350 | 211 | ||||||||||||
| LG Electronics RUS, LLC |
— | — | 38 | 203 | ||||||||||||
| LG Electronics Egypt S.A.E |
2,106 | 369 | 1 | 1 | ||||||||||||
| P.T. LG Electronics Indonesia |
3,968 | 3,771 | 105 | 108 | ||||||||||||
| Others |
3,572 | 6,122 | 4,042 | 1,811 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Subtotal |
95,562 | 219,469 | 213,954 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
2,962,080 | 9,135,204 | 8,067,485 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (*1) | Trades accounts and notes payable and others for LG Electronics Inc. as of March 31, 2024 and
December 31, 2023 includes long-term borrowings of |
| (*2) | Trade accounts and note payable and others for LG Innotek Co., Ltd. as of March 31, 2024 and
December 31, 2023 Includes deposits received amount |
The Company has not recognized any bad debt expense or allowance for doubtful accounts from related parties at the end of the reporting period.
58
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (d) | Significant financial transactions and others with related parties for the three-month periods ended March 31, 2024 and 2023, is as follows: |
| 2024 |
||||||||||
| (In millions of won) | Company Name |
Borrowings | Collection of loans | |||||||
| Subsidiary |
LG Display Singapore Pte. Ltd. | — | ||||||||
| Associates |
WooRee E&L Co., Ltd | — | 110 | |||||||
For the three-month period ended March 31, 2024, the Company contributed
W652 million in cash for the capital increase of LG DISPLAY FUND I LLC and W832,200 million in cash for the capital increase of Money Market Trust in addition to the above transactions
| 2023 |
||||||
| (In millions of won) | Company Name |
Borrowings | ||||
| Entity that has significant influence over the Controlling Company |
LG Electronics Inc. | |||||
The Company entered into a loan agreement with LG Electronics Inc. on March 27, 2023 for a total borrowing
amount of W1,000,000 million, and received W650,000 million on March 30, 2023 and W350,000 million on April 20, 2023.
For the three-month period ended March 31, 2023, the Company contributed W1,840 million in cash for the capital increase
of LG DISPLAY FUND I LLC and W100,000 million in cash for the capital increase of Money Market Trust in addition to the above transactions
59
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (e) | Large Enterprise Group Transactions |
According to the ‘Related Party Disclosures’ under the Korean IFRS 1024, although not included in the scope of related parties, the major transaction details with the Large Enterprise Group subsidiaries and their affiliates, as well as the amounts of receivables and payables for the three-month periods ended March 31, 2024 and 2023 and as of March 31, 2024 and December 31, 2023, in accordance with the Monopoly Regulation and Fair Trade Act, are as follows :
| (In millions of won) | ||||||||||||||||
| For the three-month period ended March 31, 2024 |
March 31, 2024 | |||||||||||||||
| Sales and others |
Purchase and others |
Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||
| LG Uplus Corp. |
796 | — | 426 | |||||||||||||
| LG Chem Ltd. and its subsidiaries |
109 | 109,265 | 112 | 172,600 | ||||||||||||
| D&O Corp. and its subsidiaries |
78 | 32,995 | — | 65,101 | ||||||||||||
| LG Corp.(*) | — | 13,011 | 18,857 | 5,626 | ||||||||||||
| LG Management Development Institute |
— | 10,054 | — | 625 | ||||||||||||
| LG CNS Co., Ltd. and its subsidiaries |
— | 31,704 | — | 36,351 | ||||||||||||
| HS AD Inc.(formerly, G2R Inc.) and its subsidiaries |
— | 1,793 | — | 3,966 | ||||||||||||
| Robostar Co., Ltd. |
— | 13 | — | 27 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 199,631 | 18,969 | 284,722 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (*) | According to the lease agreement signed with LG Corp., the recognized lease liabilities as of March 31,
2024 are |
60
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (In millions of won) | ||||||||||||||||
| For the three-month period ended March 31, 2023 |
December 31, 2023 | |||||||||||||||
| Sales and others |
Purchase and others |
Trade accounts and notes receivable and others |
Trade accounts and notes payable and others |
|||||||||||||
| LG Uplus Corp. |
— | 635 | — | 206 | ||||||||||||
| LG Chem Ltd. and its subsidiaries |
68 | 79,294 | 18 | 155,312 | ||||||||||||
| D&O Corp. and its subsidiaries |
77 | 207,925 | — | 69,503 | ||||||||||||
| LG Corp. (*1) | — | 11,162 | 16,261 | 5,575 | ||||||||||||
| LG Management Development Institute |
— | 10,764 | — | 543 | ||||||||||||
| LG CNS Co., Ltd. and its subsidiaries |
— | 32,786 | — | 89,939 | ||||||||||||
| HS AD Inc.(formerly, G2R Inc.) and its subsidiaries (*2) |
— | 6,204 | — | 5,687 | ||||||||||||
| Robostar Co., Ltd. |
— | 195 | — | 217 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 348,965 | 16,279 | 326,982 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (*1) | According to the lease agreement signed with LG Corp., the recognized lease liabilities as of December 31,
2023 are |
| (*2) | G2R Inc. changed its name to HS AD Inc. on July 1, 2023. |
61
LG DISPLAY CO., LTD.
Notes to the Condensed Separate Interim Financial Statements
March 31, 2024 and 2023 (unaudited), and December 31, 2023
| 26. | Related Parties and Others, Continued |
| (f) | Key management personnel compensation |
Compensation costs of key management for the three-month periods ended March 31, 2024 and 2023 are as follows:
| (In millions of won) | ||||||||
| 2024 | 2023 | |||||||
| Short-term benefits |
563 | |||||||
| Expenses related to the defined benefit plan |
325 | 89 | ||||||
|
|
|
|
|
|||||
| 652 | ||||||||
|
|
|
|
|
|||||
Key management refers to the registered directors who have significant control and responsibilities over the Company’s operations and business.
| 27. | Subsequent Event |
On April 24, 2024, the Board of Directors resolved to sell part of the company’s land and buildings located in Paju, Gyeonggi-do, to LG U+ Co., Ltd. for W105,300 million for the purpose of enhancing asset utilization.
62
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LG Display Co., Ltd. | ||||||
| (Registrant) | ||||||
| Date: May 16, 2024 | By: | /s/ Suk Heo | ||||
| (Signature) | ||||||
| Name: | Suk Heo | |||||
| Title: | Director / Head of IR Division | |||||
1 Year LG Display Chart |
1 Month LG Display Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Hot Features
Premium
