Paid Broadcasting Market Challenges... LG HelloVision's Operating Profit Drops 71% Last Year

Decrease in Home Shopping Transmission Fees
Increase in Program Usage Fees
Net Loss of 106.2 Billion KRW for the Year

LG HelloVision announced on the 6th that it recorded sales of 1.1964 trillion KRW and an operating profit of 13.5 billion KRW last year. Compared to the previous year, sales increased by 6.2 billion KRW (0.5%), while operating profit decreased by 33.9 billion KRW (-71.5%).

Annual sales slightly increased due to the performance of rental and business-to-business (B2B) transactions, but operating profit declined due to reduced home shopping transmission fees, increased broadcasting program usage fees, and higher costs from new business expenses such as labor. The annual net income recorded a deficit of 106.2 billion KRW, reflecting the challenges in the paid broadcasting market through goodwill and asset impairment evaluations.

In the fourth quarter of last year, sales amounted to 322.3 billion KRW, with an operating loss of 1.3 billion KRW. Fourth-quarter sales decreased by 15 billion KRW (-4.5%) compared to the same period last year and by 1 billion KRW (-0.3%) compared to the previous quarter. Operating profit fell by 14 billion KRW (-110.5%) year-over-year and by 4.6 billion KRW (-140.5%) quarter-over-quarter. The decline in fourth-quarter operating profit was largely influenced by home shopping and broadcasting program usage fees.

By business segment, fourth-quarter sales were 120.7 billion KRW in broadcasting, 33.9 billion KRW in telecommunications (high-speed internet), 39.1 billion KRW in MVNO, and 32.3 billion KRW in rental. Regional-based businesses, including media and B2B, achieved 81 billion KRW. Other businesses, such as educational smart devices, recorded 15.3 billion KRW.

Despite the downturn in broadcasting and telecommunications businesses last year, LG HelloVision focused on qualitative growth in the home business and pursued entry into regional new businesses. Notably, it achieved meaningful results based on growth in new businesses such as rental and education.

The home business drove qualitative subscriber growth through service advancement, including the launch of technology-neutral products, while the budget phone and rental businesses received positive responses with products aligned with rational consumption trends and convenient services through direct online malls. Synergies between regional channel production capabilities and the PP business were also strengthened.

Lee Min-hyung, Executive Director (CFO/CRO) of LG HelloVision, stated, "This year, we will improve profitability through management efficiency and strengthening core business competitiveness, while securing additional growth engines in home and regional sectors."