[Concall] LGU+ "Achieved Annual Service Revenue Growth Target of 4%"

Formation of Solar Power Construction TF... Promotion of Renewable Energy Purchase

LG Uplus' first-quarter results fell short of expectations, but the company plans to accelerate performance growth in the second quarter. It aims to achieve the annual service revenue growth target of over 4% set at the beginning of the year.

LG Uplus announced that its consolidated operating revenue (sales) for the first quarter increased by 3.9% year-on-year to KRW 3.5413 trillion, while operating profit decreased by 0.4% year-on-year to KRW 260.2 billion.

LG Uplus showed somewhat disappointing results compared to its initial plan of more than 4% growth in service revenue on a separate basis in the first quarter. On the conference call that day, CFO Yeom Myung-hee said, "While the mobile business performed well, the smart home and enterprise infrastructure businesses were somewhat below expectations." She added, "The smart home sector grew by 2.2%, falling short of expectations. Although the enterprise infrastructure's Internet Data Center (IDC) grew by more than 20%, messaging revenue, which had increased last year due to elections and COVID-19, declined." She further explained, "Additionally, compensation related to a DDoS incident was temporarily reflected in the first quarter, resulting in lower growth rates for smart home and enterprise infrastructure services." However, on an annual basis, the company expects to achieve growth rates exceeding last year through growth in existing businesses such as enterprise lines and IDC, as well as new businesses like small merchants and mobility. CFO Yeom stated, "We will do our best to achieve the annual guidance, improve operating profit, and enhance shareholder value."

Regarding ESG (Environmental, Social, and Governance) management plans, she said, "In the first quarter of this year, we established plans for solar power facilities and renewable energy procurement." She added, "In the second quarter, we will actively pursue renewable energy purchases and form a task force (TF) to develop concrete plans for building solar power facilities." She also mentioned, "We plan to reduce greenhouse gas emissions by cutting electricity usage and maintaining databases and systems."

LG Uplus' capital expenditure (CAPEX) in the first quarter rose by 40% compared to last year. CFO Yeom explained, "In the first quarter, we accelerated investments to improve customer-perceived quality by utilizing the 3.5 GHz frequency band additionally allocated last year." She added, "As a result, CAPEX execution increased by 40% year-on-year, but the annual CAPEX plan will be maintained as originally planned." She further noted, "Although investments related to information security are planned, through efficient investment management, this year's annual CAPEX will be executed at a level similar to last year."

Investment in budget phones will also be expanded. Lee Jae-won, head of LG Uplus MX Innovation Group, said, "We plan to expand the offline consulting specialty stores for budget phones called 'Altteul Phone+'." He added, "We will open seven additional stores in Incheon, Daegu, Busan, and other locations."