- Service Revenue Growth: 1.6% on consolidated basis, 2.1% on stand-alone basis year over year.
- First Half Service Revenue Growth: 2.4% year over year on a separate basis.
- Consolidated Operating Profit: KRW 254 billion, down 11.8% year over year, up 15% quarter over quarter.
- Net Profit: KRW 164.6 billion, down 22.8% year over year, up 26.2% quarter over quarter.
- Consolidated Q2 EBITDA: KRW 920.2 billion, up 0.4% year over year.
- Mobile Service Revenue: KRW 1,520.1 billion, up 1.7% year over year.
- Total Mobile Subscription Count: 27,223,000, up 25.6% year over year.
- 5G Handset Subscription Count: 7,413,000, accounting for 67.7% of handset subscriptions.
- MVNO Subscription Count: 7,386,000, up 51.5% year over year.
- Q2 Marketing Spend: KRW 521.7 billion, down 3.3% year over year.
- Smartphone Revenue: KRW 618.2 billion, up 2.5% year over year.
- IPTV Revenue: KRW 334.9 billion, down 0.6% year over year, up 0.2% quarter over quarter.
- Internet Revenue: KRW 283.3 billion, up 6.5% year over year.
- IPTV Subscriber Count: 5,518,000, up 2.3% year over year.
- Internet Subscriber Count: 5,269,000, up 4.4% year over year.
- Enterprise Infrastructure Business Revenue: KRW 431.5 billion, up 5.4% year over year.
- IDC Business Revenue: KRW 91.7 billion, up 15% year over year.
- Solution Business Revenue: KRW 130.8 billion, up 2.7% year over year.
- Enterprise Line Revenue: KRW 208.9 billion, up 3.3% year over year.
Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Service revenue grew by 1.6% on a consolidated basis and 2.1% on a stand-alone basis year over year.
- Total mobile subscription count increased by 25.6% year over year, with 5G subscriptions accounting for 67.7% of handset subscriptions.
- Q2 marketing spend fell by 3.3% year over year due to effective cost savings from digitalization efforts.
- Internet revenue increased by 6.5% year over year, driven by solid GiGA Internet growth.
- Enterprise Infrastructure business showed balanced growth across all segments, with IDC business posting a 15% year-over-year growth.
Negative Points
- Consolidated operating profit for Q2 was down 11.8% year over year.
- Net profit decreased by 22.8% year over year.
- IPTV revenue declined by 0.6% year over year.
- The company faces challenges in maintaining growth momentum in the highly competitive telecommunications market.
- The financial impact and utilization rate of the new data center in Pardus are still under review and not yet fully disclosed.
Q & A Highlights
Q: Does LG Uplus plan to phase out any current businesses, and what is the approach to shareholder returns given the limited growth expected in 2024?
A: (Myeong Hui Yeo, CFO) We continuously review our business portfolio and potential risks. Our focus is on digitalizing telecommunications and expanding B2B growth. We aim to drive subscriber growth through digital channels and streamline costs. For shareholder returns, we are positively reviewing participating in the government's value-up program and will disclose our plan before the end of the year.
Q: What is the utilization rate of the new data center and its financial impact? Also, provide an update on the AI-driven call agent, XTO.
A: (Unidentified Company Representative) The new data center in Pardus is under review, and we will provide more details once the design is complete. Currently, we have seven data centers with a capacity of 350 megawatt hours, showing double-digit growth in utilization. (Jae Won Lee, Head of MX Digital Innovation) XTO is targeted for release in Q4 2024, focusing on improving voice call convenience and security using AI. The model, Exagen, is lightweight and can be applied flexibly to various applications.
Q: What are the key focuses for LG Uplus's new business initiatives?
A: (Myeong Hui Yeo, CFO) Our new business initiatives focus on digitalizing telecommunications and expanding B2B services. We aim to drive subscriber growth through digital channels and streamline distribution costs. In B2B, we focus on AI and digital transformation solutions, including EICC and DX solutions for SOHO customers, supported by our IDC.
Q: What is the strategy for the EV charging business?
A: (Myeong Hui Yeo, CFO) We established a JV entity, LG Uplus Bolt-On, with Kakao Mobility, each investing KRW25 billion. The entity will have independent decision-making authority, aiming to become a top-three player in the slow charging market by 2027.
Q: How does LG Uplus plan to enhance shareholder value?
A: (Myeong Hui Yeo, CFO) We are revisiting our capital cost calculation and studying shareholder return policies of major companies. We aim to strike a balance between long-term growth and progressive shareholder returns, planning to disclose our shareholder return and corporate value enhancement plan before the end of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
