LG Uplus, Revenue Increased but... Operating Profit Down 3.2% and Net Profit Down 13.9%

2024 Q3 Earnings Announcement
Growth in Corporate Infrastructure Sector
"New Integrated IT Network Construction"

LG Uplus's operating profit for the third quarter of this year was 246 billion KRW, a 3.2% decrease compared to the same period last year. Net profit also fell by 13.9%.

Hwang Hyun-sik, CEO of LG Uplus. Provided by LG Uplus

LG Uplus announced on the 8th that its sales from July to September this year reached 3.8013 trillion KRW, a 6.2% increase compared to the same period last year. The growth in sales is attributed to the expansion of the enterprise infrastructure and smart home sectors.

However, the third quarter operating profit was 246 billion KRW, down 3.2% compared to the third quarter of last year. The operating profit margin also declined by 0.5 percentage points. Net profit was 134.9 billion KRW, a 13.9% decrease compared to the same period last year.

In response, LG Uplus explained, "The amortization cost of intangible assets related to the new integrated IT system construction, which has been affecting results since the fourth quarter of last year, continued to be reflected." Since last year, LG Uplus has been developing and operating a next-generation integrated IT system that facilitates the application of future technologies such as AI and enhances security.

Sales in the enterprise infrastructure sector, which incorporates artificial intelligence (AI) technology, recorded 428.5 billion KRW, an 8.6% increase compared to the same period last year. Stable revenue growth from key AI application services such as AI contact centers and AI transition solutions for small business owners drove growth in the enterprise infrastructure sector.

Internet Data Center (IDC) business sales also increased by 8.8% year-on-year to 90 billion KRW.

Marketing expenses in the third quarter rose by 0.5% year-on-year to 556.1 billion KRW due to the launch of flagship smartphones. CAPEX (capital expenditure) was 448.4 billion KRW, down 14.4% year-on-year, as the construction of base stations following the allocation of an additional 20 MHz frequency was completed.

Mobile sector sales recorded 1.6204 trillion KRW, a 2.1% increase compared to the same period last year, supported by qualitative growth such as MNO subscription lines surpassing 20 million for the first time and the 5G penetration rate exceeding 70% based on handsets.

IPTV subscription lines in the third quarter of this year reached 5.554 million, a 2.2% increase compared to the same period last year. Sales were 335.7 billion KRW, similar to last year's 337.1 billion KRW. High-speed internet subscription lines increased by 3.9% year-on-year to 5.313 million. Sales rose by 6.7% compared to the third quarter of last year, reaching 287.2 billion KRW.