LGU+ Reports Operating Profit of 219.8 Billion KRW in Q1, Up 11.5% YoY, Showing Strong Performance (Comprehensive)

Operating Revenue Up 11.9% Year-on-Year
Continuous Subscriber Growth Led by Mobile, IPTV, and High-Speed Internet Net Increase Rankings
Untact Business Growth Driven by Increased Indoor Activities Due to COVID-19
IPTV VOD Revenue and IDC Business Growth Propel Corporate Earnings Expansion

[Asia Economy Reporters Heungsun Kim and Chaeun Koo] LG Uplus announced on the 8th that its operating profit for the first quarter of 2020, based on consolidated financial statements, recorded 219.8 billion KRW, an 11.5% increase compared to the same period last year. This was a strong performance despite the adverse effects of the novel coronavirus disease (COVID-19).

LG Uplus analyzed on the same day that "the increase in subscribers for mobile, IPTV (Internet Protocol Television), and high-speed internet, along with the growth of untact (contactless) businesses due to increased indoor activities, drove the strong performance."

Both operating revenue (sales) and service revenue also increased. Operating revenue for the first quarter rose 11.9% year-on-year to 3.2866 trillion KRW, and service revenue?which is the combined revenue from mobile, smart home, and enterprise services excluding device revenue?also increased by 15.2% to 2.5175 trillion KRW.

LG Uplus attributed the increase in first-quarter operating profit to continuous growth by ranking first in net subscriber additions in mobile, IPTV, and high-speed internet. They added that the synergy effect with LG HelloVision, growth in mobile micropayments and video-on-demand (VOD) sales due to increased indoor activities, and rising demand from internet data center (IDC) customers contributed to the growth of untact-related businesses.

The increase in service revenue was mainly due to the inclusion of LG HelloVision's service revenue of 232 billion KRW in the consolidated income statement from this period, following LG HelloVision's acquisition as a subsidiary in December last year. Even excluding LG HelloVision's performance, service revenue grew 4.9% year-on-year, driven by growth in MVNO (Mobile Virtual Network Operator) subscribers and the smart home business.

Mobile service revenue in the first quarter recorded 1.336 trillion KRW, a 6.2% increase compared to the same period last year. This was attributed to providing differentiated 5G content such as smart home training, augmented reality (AR) shopping, and cloud gaming. The cumulative number of 5G subscribers in the first quarter increased by 291,000 to 1.455 million.

LG Uplus Summary Consolidated Income Statement

The total cumulative number of mobile subscribers reached 15.519 million, up 7.8% year-on-year. Notably, MVNO subscribers increased by 38.2% compared to the same period last year. Additionally, smart home revenue, which combines IPTV, high-speed internet, and internet phone revenues, rose 8.1% year-on-year to 537.8 billion KRW. IPTV revenue increased 12.4% year-on-year to 281.1 billion KRW, with cumulative subscribers rising 10.8% to 4.597 million. High-speed internet revenue also grew 6.6% year-on-year to 208.5 billion KRW.

Enterprise revenue was 380 billion KRW, a 0.4% increase compared to the same period last year. LG Uplus explained that IDC revenue rose 32.6% year-on-year due to increased data usage by large cloud service providers, maintaining overall growth.

Marketing expenses in the first quarter were 565 billion KRW, up 10.4% year-on-year but down 3.1% compared to the previous quarter, maintaining a stabilization trend for the second consecutive quarter. Capital expenditures (CAPEX) increased 35.3% year-on-year to 374.6 billion KRW due to the expansion of 5G coverage. LG Uplus plans to continue investing in expanding 5G coverage in densely populated areas, large buildings' in-building networks, and subways this year.

Lee Hyuk-joo, Vice President and Chief Financial Officer (CFO) of LG Uplus, said, "Despite the COVID-19 adversity significantly impacting the industry in the first quarter, making revenue generation and forecasting difficult, we overcame the crisis and achieved balanced growth in core business areas. We will efficiently manage operating expenses to improve operating profit and monitor market environment changes to prepare for the untact era after COVID-19."

This content was produced with the assistance of AI translation services.