Here comes horrid

9 Jul 2004 By Robert Cyran Follow @rob_cyran

Operating profits are booming at the flat screen maker, yet prospects for a successful float aren t. Falling flat screen prices leave the group looking well past its sell by date. Profits have shot up at the flat screen maker. But they are probably at the peak.

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LG Philips LCD reported second quarter sales and earnings rose sharply, just as it prepares for its initial public offering. The joint venture to produce flat screens reported sales rose 77% to $2bn (2.3 trillion Korean Won) compared to the same period last year. Operating profits rose from $97m to $671m.

The group announced in April that it expected to raise around $1bn in a New York and Seoul flotation. It then doubled the amount sought in May. In June, LG Philips LCD cut the size twice, and now seeks to raise $1.3bn$1.6bn. The stock will be priced on July 15.

The parents of the group – LG Electronics and Philips – will each sell 5m shares. Each will retain a 43% stake in the joint venture following the IPO. An additional 24m new shares will also be issued. The company's market capitalisation will be $9.7bn$11.6bn based upon the indicated range.

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