LG Uplus 2019 profit down as investment, marketing costs rise

(Yonhap)

LG Uplus Corp., South Korea's No. 3 mobile carrier, said Friday its net profit fell 8.9 percent last year from a year earlier as it ramped up spending on its 5G network and marketing.

In a regulatory filing, LG Uplus reported a net income of 438.8 billion won ($369.2 million) last year, down from 481.6 billion won in 2018, on a consolidated basis.

The company said that operating profit for the year fell 7.4 percent on-year to 686.2 billion won, although its annual revenue rose 5.6 percent on-year to 12.38 trillion won.

LG Uplus attributed its lukewarm 2019 earnings to increased network investment and marketing costs for its commercial 5G service.

Last year, LG Uplus' capital expenditure reached 2.6 trillion won, up 86.7 percent from a year ago, as it focused on setting up 5G infrastructure nationwide.

The company also spent 2.2 trillion won on marketing activities to attract 5G customers in 2019, up 8.7 percent from a year earlier. The company began its commercial 5G service in April.

In the fourth quarter, LG Uplus posted a net profit of 103.3 billion won, up 37.2 percent from a year earlier.

The company's operating profit surged 68.9 percent on-year to 182.2 billion won in the October-December period, while sales increased 3 percent on-year to 3.17 trillion won.

For the whole of 2019, LG Uplus' wireless business posted revenue of 5.5 trillion won, up 1.4 percent from a year earlier.

The company said its mobile service subscribers numbered 15.25 million in 2019, up 1.12 million from the year before, with 1.16 million customers using its 5G service.

Sales from the company's non-mobile businesses, such as high-speed internet and electronic payment, rose 4.5 percent on-year to 4 trillion won last year, LG Uplus said.

In particular, its IPTV business logged 1.03 trillion won in sales last year, up 16.6 percent from the previous year. The company said the number of its IPTV service subscribers stood at 4.47 million in 2019, up 458,000 from a year earlier.

For this year, LG Uplus said it plans to beef up its 5G-related services as well as B2B businesses, by for example, providing solutions to smart factory and drone operations. (Yonhap)