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(2nd LD) LG Uplus downplays Huawei risk, Q3 net nearly quadruples

All News 16:16 November 05, 2020

(ATTN: RECASTS headline and lead; ADDS more details throughout)

SEOUL, Nov. 5 (Yonhap) -- LG Uplus Corp., a major South Korean telecom operator, downplayed concerns Thursday over its use of network equipment by Huawei Technologies Co. amid U.S. pressure to sever ties with the Chinese company, citing the completion of equipment installation and a healthy backlog for maintenance.

The United States has repeatedly pressed the South Korean carrier to stop using Huawei's 5G equipment, claiming the Chinese telecom equipment maker poses a security risk and could compromise the country's internet communications infrastructure.

U.S. sanctions against the Chinese network equipment vendor earlier this year have heightened worries that carriers using its equipment face supply uncertainties.

"While I feel the negative impact from the Huawei issue on our stock price, this is derived from the U.S.-China conflict," LG Uplus Chief Financial Officer Lee Hyuk-ju said in a conference call. "Huawei equipment consists of 30 percent of our coverage, and we have completed installation."

"We have also secured inventory for equipment maintenance, and we believe that there won't be impact on our current services," he added.

The telecom operator's remarks come as its net income nearly quadrupled in the third quarter thanks to asset sales and strong growth in its mobile service and smart home businesses.

This file photo, taken July 23, 2020, shows the logo of LG Uplus Corp. at its headquarters in central Seoul. (Yonhap)

The telecom operator's net income stood at 403.4 billion won (US$356.3 million) in the July-September period, up 286.2 percent from 104.5 billion won the previous year, according to a regulatory filing.

Operating income reached 251.2 billion won, up 60.6 percent over the same period, while sales rose 5.9 percent to 3.34 trillion won over the cited period.

The carrier said the sale of its payment gateway business to local fintech firm Viva Republica Ltd. on Aug. 1 added 231 billion won in profit to its third-quarter balance sheet.

LG Uplus also credited its robust bottom line to increased subscribers in its mobile and smart home businesses as it increased online sales channels amid the pandemic.

The company said sales from its wireless service business in the third quarter rose 5.4 percent on-year to 1.38 trillion won.

LG Uplus' wireless service subscribers reached 16.3 million as of September, rising 8.7 percent from the previous year.

The carrier said its 5G users reached 2.17 million in the same quarter, accounting for 19.2 percent of its total mobile phone subscriptions.

Sales from the company's smart home business, which includes its internet protocol TV and broadband services, rose 12.5 percent on-year to reach 514.3 billion won in the third quarter.

LG Uplus' shares closed 3.49 percent higher to 11,850 won, outperforming the broader KOSPI's rise of 2.4 percent.

yunhwanchae@yna.co.kr
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