LG Uplus Achieves Record High Performance Last Year... Dividend Payout Ratio Increased from 30% to 40%

[Asia Economy Reporter Lim Hye-sun] LG Uplus recorded its highest-ever performance, driven by the expansion of 5G (5th generation mobile communication) adoption and the launch of new smartphones.

LG Uplus announced on the 28th that its operating profit last year was 979 billion KRW, a 10.5% increase compared to the previous year. During the same period, sales increased by 3.2% year-on-year to 13.8511 trillion KRW, and net profit also rose by 51.5% to 724.2 billion KRW. This is the best performance since LG Telecom, Dacom, and Powercom merged in 2010 to form LG Uplus.

Growth in the core wireless segment led the strong results. According to the Ministry of Science and ICT’s “Wireless Communication Service Statistics,” as of the end of November last year, the number of domestic 5G subscribers reached 20,189,808. The number of 5G subscribers surpassed 10 million in November 2020 and exceeded 20 million within a year, accounting for 27.8% of all mobile communication subscriptions.

Smart home sales, including Internet TV (IPTV) and high-speed internet, also increased. In the fourth quarter, LG Uplus expanded its market share in the paid broadcasting market through an exclusive contract with Disney Plus and the popularity of the infant-only service “Uplus Ildulnara.”

As part of strengthening its shareholder return policy, LG Uplus raised its “payout ratio” from the previous 30% or more to 40% or more. The payout ratio is the proportion of total dividends paid in cash out of separate net profit. The variable dividend policy will be applied from the 2022 fiscal year. The year-end dividend last year was 150.4 billion KRW, paying 350 KRW in cash per share. LG Uplus’s payout ratio for 2021 was 35%. The total dividend amount, including the interim dividend of 87.1 billion KRW paid in September last year, reached approximately 237.5 billion KRW, an increase of about 20.9% compared to 196.4 billion KRW the previous year. The total dividend per share also increased by about 22.2% to 550 KRW from 450 KRW in 2020.

LG Uplus explained, “This adjustment of the payout ratio was decided to enhance the company’s value, which has been undervalued compared to financial performance and growth rates in telecommunications and non-telecommunications businesses, and to improve shareholder rights,” adding, “Increasing the payout ratio has the advantage of increasing predictability of cash dividends from the shareholder’s perspective.”