LG Electronics Australia's latest financial report has revealed net profit after tax of AU$12 million, a slight decline from AU$13 million reported last financial year.
For the period ending 31 December 2019, the Australian arm of the South Korean tech company also reported revenue just shy of AU$860 million, down from AU$867 million that was achieved last year.
Noting its primary activity consisted of importing and supplying retailers with household electronic appliances, IT equipment, and mobile phones, LG Electronics Australia took nearly AU$950 million from customers, a AU$29 million drop on last year. Meanwhile, payments to suppliers and employees totalled AU$940.5 million, also a decrease from last year's AU$972 million.
Income tax paid during FY19 came in at AU$5.7 million, off the back of AU$18 million in pre-tax profit.
During the financial year, LG Electronics Australia had 309 employees, which cost the business AU$32.5 million in salaries, up marginally from AU$31.3 million during FY18.
LG Electronics also set aside AU$144,000 during the year for contingency provisions, which the company explained was in relation to two pending legal proceedings that were taken against the company.
One was by the Australian Competition and Consumer Commission (ACCC), which resulted in the company being ordered by the Australian Federal Court to pay AU$160,000 to two consumers for refusing to provide repairs, replacements, or refunds for faulty televisions.
The other legal proceeding was due to a dispute with a distributor in New Zealand until 2018.
LG Electronics also noted that it was too early to estimate the financial effects of COVID-19.
"As the situation continues to remain fluid (due to evolving changes in government policy and the evolving business and customer reactions thereto) as at the date these financial statements are authorised for issue, the directors of the company considered that the financial effects of COVID-19 on the company's financial statements cannot be reasonably estimated for future financial periods," the company stated.
"However, the directors consider that the general economic impacts arising from COVID-19 will continue to have a negative impact on consumer demand and will impact the operations of many of the company's customers and suppliers. This in turn may negatively affect the financial results, the recoverability of the company's debtors, prepayments and inventories as well as payments to suppliers."
The direct parent entity of LG Electronics Australia is LG Electronics Inc in Korea, which announced on Monday it was entering into a "long-term" patent licence agreement with Miele.
Under the agreement, Miele will be able to produce and sell robot vacuum cleaners using patented technologies developed by LG.
These patented technologies include LG's induction signal guide and infrared-induced signals that enable robot cleaners to accurately and precisely return to their docking stations for charging, and a licence relating to dust unit detection and agitator attachment technologies.
Similar remarks about the coronavirus were made by the Australian arm of rival Samsung Electronics as part of its full-year financial report for 2019.
"Although the company expects the negative impact of COVID-19 on global economic and market conditions will adversely affect the company's business, the duration and extent of the further spread of COVID-19 remain uncertain at this time, and therefore the impact on results of operations remain unknown," Samsung Electronics Australia said.
For the year ending 31 December 2019, Samsung Electronics Australia reported net profit after tax of AU$38.5 million, which was slightly above last year's $38 million.
Revenue also saw a AU$200 million boost to AU$2.8 billion, where sales of goods made up 99% of total revenue.
The increase in year-on-year profit and revenue saw the company, which employs 301 staff in Australia, pay more tax this year, to the tune of AU$18.8 million compared to AU$15.8 million that was paid during FY18.
Of that AU$18.8 million figure, the total current tax expense accounted for AU$16.5 million, compared to last year's AU$25 million. The remaining amount was deferred tax, which decreased from a AU$9.4 million benefit to a AU$2.3 million charge in 2019.
For FY19, Samsung Australia cited it had cash inflow of AU$23.6 million from operating activities, more than double last year's AU$10.6 million, after taking just over $3 billion from customers. However, the company paid around the same AU$3 billion figure to suppliers and employees.
South Korea-based Samsung Electronics is the immediate and ultimate parent company of Samsung Electronics Australia.
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