Stage Five Reports 13 Billion KRW Operating Loss Last Year... "Turnaround Through Operational Efficiency This Year"
Stage Five, the largest shareholder of the 4th mobile carrier StageX, recorded an operating loss last year. This year, the company plans to achieve a turnaround through strategic investments continuously made since last year and growth across all business sectors.
According to the audit report on the 7th, Stage Five posted sales of 44.3 billion KRW and an operating loss of 13 billion KRW last year. Although sales increased by 62.9% compared to the previous year, the deficit more than doubled.
Regarding these results, the company explained, "The change in accounting standards from the Korean Generally Accepted Accounting Principles (K-GAAP) to Korean International Financial Reporting Standards (K-IFRS) for the 2022 IPO preparation caused the redeemable convertible preferred shares, which were previously classified as equity, to be treated as liabilities."
Redeemable convertible preferred shares are classified as equity under K-GAAP, which is mainly applied by unlisted companies, but under K-IFRS, which listed companies use for financial statement preparation, they are classified as liabilities.
Stage Five changed its accounting standards to K-IFRS in preparation for its IPO in 2022. As a result, the redeemable convertible preferred shares, which had been classified as equity, were recognized as liabilities, increasing the loss magnitude.
Stage Five aims to make this year the first year of a performance turnaround by pursuing structural and cost efficiencies. Significant performance improvements are expected as sales grow in each business division, including devices, roaming, and Mobile Virtual Network Operator (MVNO). Cost reduction effects are also anticipated through billing internalization, the introduction of artificial intelligence (AI) systems, and data-driven marketing.
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A company representative said, "We have achieved double-digit sales growth for three consecutive years and have been valued at over 300 billion KRW in the investment market," adding, "We will realize performance improvements this year through business growth and operational efficiency efforts."
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