Feb 11 (Reuters) - LG Electronics India reported a near 62% drop in third-quarter profit on Wednesday, hit by weaker demand in its home appliances and air solutions business as cooler weather hurt sales of cooling products in Asia's third-largest economy.
The Indian unit of South Korea's LG Electronics posted a standalone profit of 896.7 million rupees ($9.89 million) for the quarter ended December 31, down from 2.33 billion rupees a year earlier.
Demand for room air conditioners remained subdued for most of the quarter as cooler-than-usual weather dampened sales, while elevated inventory levels at dealers curtailed fresh orders, analysts said.
LG said demand in its home appliances segment softened after the festival of Diwali, when Indians typically splurge on big-ticket items, but it chose not to cut prices to protect long-term profitability.
Analysts at ICICI Securities expected a weaker third quarter for LG India. However they said, the company is prioritising margin protection over volume growth in a soft demand environment, positioning it well for when demand normalises.
Revenue from the company's home appliances and air solutions division fell 10% to 27.88 billion rupees, pushing overall revenue down 6% to 41.14 billion rupees.
AC makers Voltas and Blue Star posted a drop in third-quarter profit, hurt by weakness in their cooling products segment and charges related to India's new labour laws.
LG reported a 124.50 million rupee impact on its results from the labour code changes.
The company said that the reduction of U.S. tariffs and EU trade deal with India is expected to drive export-related opportunities, adding that it aims to double exports in the next financial year.
LG's revenue from the home entertainment segment rose nearly 2%, helped by the country's recent slashing of consumption tax.
Shares of the company closed 1.5% lower on the day and are down 11% since listing in October.
($1 = 90.6910 Indian rupees)
(Reporting by Nishit Navin and Urvi Dugar in Bengaluru; Editing by Tasim Zahid)
