LG Uplus Joins '1 Trillion Won Operating Profit Club'... 10.4% Increase YoY

[Asia Economy Reporter Kang Nahum] LG Uplus has joined the '1 trillion won operating profit club' for the first time since its establishment. The increase in mobile subscribers and revenue from smart home and enterprise infrastructure drove the strong performance.

LG Uplus announced on the 3rd that it recorded consolidated sales of 13.906 trillion won and operating profit of 1.0813 trillion won last year. Sales and operating profit increased by 0.4% and 10.4%, respectively, compared to the previous year.

Quarterly sales were 3.6106 trillion won, similar to the same period last year. Operating profit increased by 81.1% year-on-year to 286.6 billion won.

On an annual basis, marketing expenses stabilized, decreasing by 0.4% year-on-year to 2.2766 trillion won, and the ratio of marketing expenses to service revenue fell by 0.8 percentage points to 21.6% compared to the previous year.

Annual mobile revenue reached 6.1832 trillion won, up 2.1% from the previous year. Wireless service revenue excluding access revenue also grew 2.4% to 5.8309 trillion won. The growth in mobile revenue was driven by an increase in MNO and MVNO subscribers, as well as qualitative improvements such as 5G penetration rate and churn rate.

The total number of wireless subscribers increased to 19.896 million, a 10.6% rise from the previous year. In particular, 5G subscribers reached 6.11 million, up 32.1% year-on-year. Among all handset subscribers, 5G customers accounted for 53.5%. As of Q4 2022, the MNO churn rate was 1.03%, improving by 0.37 percentage points compared to the same period last year.

MVNO subscribers also continued to increase, reaching 3.873 million, up 36.7% from the previous year. Activities to revitalize the MVNO market, such as the small business win-win program '+Alpha', MVNO consultation zones, and specialized consulting stores, are believed to have driven subscriber growth.

The 'Smart Home' segment, consisting of IPTV and high-speed internet, continued its growth with revenue of 2.3445 trillion won, up 6.4% compared to the previous year.

The IPTV business recorded revenue of 1.3263 trillion won, a 5.6% increase year-on-year, receiving favorable reviews for enhancing user convenience through the revamp of the 'OTT TV' platform that allows simultaneous access to live broadcasts, video on demand (VOD), and over-the-top (OTT) services, as well as the introduction of big data-based recommendation features.

The high-speed internet business also contributed to the improvement of Smart Home performance by achieving revenue of 1.0182 trillion won, up 7.4% from the previous year, with a steady increase in high-value subscribers.

Enterprise infrastructure revenue was recorded at 1.5837 trillion won, up 6.1% year-on-year. Balanced growth across all business areas, including B2B new businesses (smart mobility and smart factory), solutions, enterprise lines, and IDC, positively influenced the results.

The solutions business achieved revenue of 524.3 billion won, up 7.3% year-on-year, as efforts to expand the industry scope, such as advancing B2B new business solutions and launching services dedicated to small and medium-sized enterprises, bore fruit. IDC and enterprise line businesses recorded 280.7 billion won and 778.7 billion won, respectively, increasing by 8.6% and 4.4% compared to the same period last year.

Yeom Myung-hee, LG Uplus Chief Financial Officer (CFO), said, "LG Uplus is achieving stable growth by strengthening competitiveness in existing and new businesses and promoting cost efficiency. This year as well, we will do our best to achieve management goals and enhance shareholder value by flexibly responding to market conditions along with revenue growth."