The New Zealand branch of LG Electronics Australia has posted its financial results for financial year 2019 (FY19), reporting an increased sales revenue of $93.6 million – a 3% increase from the $90.9 million posted in the prior-year period.
Cost of sales did increase by 4.4% year-on-year, however, rising from $70 million in FY18 to $73.1 million last year.
Net profit was also down from the previous financial year, falling from $1.93 million in FY18 to $1.48 million in FY19.
LG's New Zealand branch's assets, however, saw a significant boost, rising 28% year-on-year from $27.2 million to $34.9 million between FY18 and 19.
Total equity was also up on FY18, rising slightly from $8.5 million in FY18 to $10 million last year.
The report noted that the impact of COVID-19 was not reflected in the financial results as the report concerned only the fiscal data for 2019's financial year. Disruptions to supply chains and the wider economic process as a result of the pandemic means that subsequent financial results will likely be affected.
“The outbreak of COVID-19 and the subsequent quarantine restrictions and strict measures imposed by the New Zealand, Australia and other governments as well as the travel and trade restrictions imposed by New Zealand and other countries in March 2020 have caused disruption to businesses and general economic activity,” the official financial statements noted.
“The Branch considers this to be a non-adjusting post balance sheet event and accordingly any financial effects of COVID-19 have not been reflected in the company's financial statements at 31 December 2019.
The report also noted that the true financial consequences of the pandemic for the company cannot be easily foreseen.
“The directors of the branch considered that the financial effects of COVID-19 on the branch's financial statements cannot be reasonably estimated for future financial periods,” the official report said.
“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 branch's customers and suppliers.
“This, in turn, may negatively affect the financial results, the recoverability of the branch's debtors, prepayments and inventories as well as payments to suppliers.
The report also made it clear that apart from the disruption caused by the pandemic, the company was otherwise performing well.
“No other matter or circumstance has occurred subsequent to year-end that has significantly affected, or may significantly affect, the operations of the Branch, the results of those operations or the state of affairs of the Branch in subsequent financial years,” the report concluded.