LG Uplus (032640) Q3 2024 earnings summary

Executive summary

• Accelerated digital transformation with a focus on AI, launching new AI-powered services such as ixi-O and ixi-GEN to enhance customer value and experience across mobile, smart home, and enterprise segments.

• Consolidated service revenue for Q3 2024 reached KRW 2.99 trillion, up 2.9% year-over-year, with wireless service revenue at KRW 1.55 trillion, up 2.6% year-over-year.

• Achieved service revenue growth above guidance, despite profit pressures from increased fixed costs and depreciation.

• 5G penetration exceeded 70% of total handset subscribers, with over 7.6 million cumulative 5G subscribers and total mobile subscriptions up 17%.

• Smart Home and enterprise infrastructure segments posted strong revenue growth, supported by broadband, IPTV, and IDC expansion.

Financial highlights

• Q3 2024 consolidated service revenue grew 2.9% year-over-year to KRW 2.99 trillion; standalone service revenue up 3.5%.

• Q3 operating profit declined 3.2% year-over-year to KRW 246 billion; net profit down 13.9% to KRW 134.9 billion.

• Q3 EBITDA increased 2.4% year-over-year to KRW 920.5 billion, with an EBITDA margin of 30.8%.

• Handset revenue surged 20.0% year-over-year to KRW 810.9 billion; CAPEX for Q3 was KRW 448.4 billion, down 14.4% year-over-year.

• Total assets at Q3-end: KRW 20.71 trillion; total equity: KRW 8.90 trillion; cash and cash equivalents rose 148.3% to KRW 1.55 trillion.

Outlook and guidance

• Expect continued service revenue growth trajectory into next year, with 2024 forming the bottom for profit.

• Plans to improve profitability by reducing variable costs, enhancing business efficiency, and expanding digital channels and B2B businesses including IDC and AI solutions.

• Service revenue targeted to grow 2% year-over-year for FY2024 (excluding device sales).

• Corporate Value Up plan to be disclosed before year-end, aiming to balance long-term growth and shareholder returns.

• Targeting 30,000 customers for the 'My shop package AX solution' by year-end, aiming for KRW 200 billion in revenue by 2027.