S&P upgrades LG Electronics' credit rating outlook to 'positive'

SEOUL, Oct. 22 (Yonhap) -- S&P Global Ratings said Wednesday it has raised its outlook on LG Electronics Inc. to "positive" from "stable," saying the company is likely to improve its financial strength over the next few years.

The global credit appraiser upgraded the outlook on LG Electronics' BBB credit rating on Tuesday, the first time in three years since October 2022. Earlier this year, Moody's Investors Service raised its outlook on LG Electronics to "positive."

S&P said LG Electronics is expected to generate a strong cash flow thanks to steady earnings from its home appliance business and a turnaround at affiliate LG Display Inc.

The company's debt is also projected to decline after having received more than 1.8 trillion won (US$1.26 billion) from the stock market listing of its Indian subsidiary.

S&P highlighted that LG Electronics is one of the world's leading premium home appliance makers, maintaining stable margins even during economic uncertainty. It noted that the heating, ventilation and air conditioning (HVAC) business was growing fast on rising demand for data center cooling and energy-efficient systems.

The company's vehicle solutions division is also expected to see higher profits, supported by an order backlog of about 100 trillion won as of end-June.

S&P also predicted that LG Display's expected turnaround will support LG Electronics' financial strength. After exiting its LCD business earlier this year, LG Display is expected to return to profit in 2025 as organic light-emitting diode (OLED) panel sales increase.

odissy@yna.co.kr
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