International credit rating agency Standard & Poor's (S&P) has upgraded LG Electronics' credit rating outlook from "BBB, Stable" to "BBB, Positive." This marks the first change in roughly three years, since October 2022, and raises the possibility that LG Electronics' credit rating itself could be upgraded in the future.

S&P announced on the 21st, “LG Electronics is maintaining solid performance in its core businesses despite difficult external environments such as the US tariff hike, and the large cash inflow through the listing of its Indian subsidiary and the improved performance of its affiliate LG Display are acting as major growth drivers.”

LG Electronics recently raised approximately KRW 1.8 trillion in cash through the initial public offering (IPO) of its Indian subsidiary. S&P predicted that this fund will enhance financial liquidity and contribute to improving its debt-to-equity ratio. Furthermore, the company's automotive electronics (VS) business, with an order backlog of approximately KRW 100 trillion, is serving as a stable foundation for future earnings. In particular, the company's profitability is steadily improving, driven by improvements in order mix and operational efficiency.

The home appliance sector is also generating stable profits despite the economic slowdown through a strategy centered on high-efficiency, premium products. In the HVAC sector, increasing demand for data center cooling solutions and eco-friendly systems is emerging as a new growth engine.

S&P also predicted that if LG Display, in which LG Electronics holds a 36.7% stake, continues to show a recovery in performance, it could have a positive impact on LG Electronics' consolidated financial performance through equity method gains and losses.

In February, Moody's, another international credit rating agency, also upgraded LG Electronics' credit rating outlook from "Baa2, Stable" to "Baa2, Positive." With major global rating agencies consistently issuing positive assessments of LG Electronics' business structure and financial soundness, there's a growing possibility that the company's rating itself will be upgraded within the next one to two years.

S&P added, “Given LG Electronics’ current business portfolio and financial structure, if its financial indicators continue to improve, the credit rating itself could be upgraded.”