LGU+ Reports 15% Decrease in Operating Profit Due to Increased Network Infrastructure and Marketing Expenses (Update)

LG Uplus Announces Q1 Earnings on 9th
Revenue 3.5 Trillion KRW...1% Increase YoY
B2B Sales Rise and Mobile, Smart Home Performance

LG Uplus's operating profit in the first quarter of this year decreased by 15% compared to the same period last year due to the construction of a new integrated IT system and increased marketing expenses.

[Image source=Yonhap News]

LG Uplus announced on the 9th that it recorded sales of 3.577 trillion KRW and an operating profit of 220.9 billion KRW in the first quarter of this year based on consolidated financial statements.

Sales increased by 1.0% year-on-year, driven by growth in the business-to-business (B2B) infrastructure sector. The performance was supported by growth in the solutions business, including new businesses such as the Artificial Intelligence Contact Center (AICC) and smart mobility, as well as increased sales in the Internet Data Center (IDC) business.

However, operating profit was recorded at 220.9 billion KRW, down 15.1% year-on-year, due to costs related to the construction of the new integrated IT system and increased mobile phone marketing expenses.

Last year, LG Uplus developed and applied a next-generation integrated IT system that facilitates the application of artificial intelligence (AI) technology and enhances security.

Marketing expenses increased by 2.3% compared to the first quarter of last year, reaching 546.7 billion KRW. Capital expenditures in the first quarter were 384.9 billion KRW, down 25.9% year-on-year, as the construction of base stations following the allocation of an additional 20 MHz frequency was completed.

Mobile business sales rose 1.3% year-on-year to 1.581 trillion KRW. The total number of wireless subscriptions reached 26.268 million, increasing 27.8% year-on-year, achieving growth in the 20% range for three consecutive quarters.

The smart home business, including IPTV and high-speed internet, also continued to grow. First-quarter sales recorded 611.7 billion KRW, up 2.9% compared to the same period last year.

High-speed internet business sales increased 6.5% year-on-year to 277.5 billion KRW, maintaining a solid sales growth trend. The number of high-speed internet subscriptions rose 4.4% year-on-year to 5.218 million.

IPTV business sales increased 0.1% year-on-year to 334.1 billion KRW. In the first quarter of this year, IPTV subscriptions rose 2.1% year-on-year to 5.479 million, with net new subscriptions increasing 119.2% to 34,000.