• Consolidated Service Revenue Growth: Up 1.8% year-over-year for FY24.

• Stand-alone Service Revenue Growth: Increased by 2.3% year-over-year.

• Consolidated Operating Profit: Down 13.5% year-over-year to KRW863.1 billion.

• Consolidated Net Profit: Decreased by 44% year-over-year to KRW352.9 billion.

• Debt-to-Equity Ratio: Improved by 5.8 percentage points to 123.8%.

• Capital Expenditure (CapEx): KRW1,920.8 billion, down 23.6% year-over-year.

• Mobile Service Revenue: Grew 2.2% year-over-year to KRW6,171.1 billion.

• Total Mobile Subscription Count: Increased by 13.6% year-over-year to 28,515,000.

• Smart Home Revenue: Up 3.7% year-over-year to KRW2,506 billion.

• Internet Revenue: Increased by 6.6% year-over-year to KRW1,140.9 billion.

• Enterprise Infrastructure Revenue: Grew 1.3% year-over-year to KRW1,705.5 billion.

• FY24 Dividend Per Share (DPS): KRW650 per share.

• Dividend Payout Ratio: 54.7% based on stand-alone net profit.

• Warning! GuruFocus has detected 3 Warning Signs with XKRX:032640.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• LG Uplus Corp (XKRX:032640) reported a 2.3% year-on-year increase in stand-alone service revenue, aligning with their growth guidance.

• The company saw a significant increase in mobile subscriptions, with a 13.6% year-on-year growth, driven by IoT and MVNO subscriptions.

• Smart Home revenue grew by 3.7% year-on-year, supported by robust Giga Internet subscriber growth.

• The company is expanding its AI capabilities, launching new services like the AI voice assistant ixi-O, which has already acquired over 170,000 subscribers.

• LG Uplus Corp (XKRX:032640) improved its debt-to-equity ratio by 5.8 percentage points year-on-year, indicating better financial health.

Negative Points

• Consolidated operating profit decreased by 13.5% year-on-year, impacted by increased amortization of intangible assets and one-off labor costs.

• Net profit fell significantly by 44% year-on-year, largely due to an impairment loss from the subsidiary LG HelloVision.

• The company faces uncertainties due to expected regulatory changes, such as the abolishment of the Handset Subsidy Act, which may affect competitive dynamics.

• The Solutions business within the B2B infrastructure segment experienced a 5.7% year-on-year decline due to restructuring and downsizing.

• Despite efforts to innovate, the mobile market has seen slower 5G-driven growth, presenting challenges in capturing new opportunities.

Q & A Highlights

Q: Can you provide an update on your value up plan, specifically regarding the share cancellation timeline and the size of the buyback and cancellation? Also, what is the key driver behind the expected profit turnaround? A: The CFO, Myeong Hui Yeo, responded that they are reviewing the cancellation timeline for the 6.78 million treasury shares they own and will decide by the end of Q1 2025. The share buyback will be within 20% of net profit, with details to be shared later. The profit turnaround is expected from a 2% growth in service revenue, focusing on AX strategy-related domains like AIDC and AICC, and improving cost competitiveness and profit structure.