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(2nd LD) LG Uplus turns to red in Q4 on increased costs

All News 16:40 February 03, 2021

(ATTN: ADDS more info in paras 4, 7-14; CHANGES photo)

SEOUL, Feb. 3 (Yonhap) -- LG Uplus Corp., a major South Korean telecom operator, said Wednesday it shifted to a net loss in the fourth quarter last year due to increased marketing costs of new phones.

Net loss stood at 224.7 billion won (US$201.7 million) in the October-December period last year, compared with a net profit of 103.3 billion won the previous year, the company said in a regulatory filing.

Operating income reached 175.5 billion won, down 3.7 percent from the previous year, while sales rose 10.8 percent to 3.5 trillion won over the cited period.

This file photo, taken July 23, 2020, shows LG Uplus Corp.'s office in central Seoul. (Yonhap)

LG Uplus said its fourth-quarter marketing expenses weighed on its bottom line, rising 7.5 percent from the previous year to 626.7 billion won due to the launch of Apple Inc.'s iPhone 12 series smartphones.

The mobile carrier still enjoyed a strong annual performance thanks to increased mobile subscribers.

Its annual net income reached 478.1 billion won last year, up 8.9 percent from the previous year, while operating profit rose 29.1 percent to 886.2 billion won. Annual sales rose 8.4 percent to 13.4 trillion won over the cited period.

The company's 5G user base has rapidly grown, more than doubling on-year to 2.75 million as of the end of last year, to account for 16.5 percent of its total subscribers last year.

The company said in a conference call that it expects its 5G subscriptions to reach around 4 million by the end of this year.

LG Uplus said its annual wireless service sales rose 5.8 percent on-year to 5.46 trillion won, with its total wireless subscriber count, including those from its subsidiary LG HelloVision Corp., jumping 9.2 percent to 16.65 million over the same period.

Annual sales from the telecom operator's smart home business, which includes its internet protocol TV (IPTV) service, saw 9.9 percent growth on-year to 2 trillion won as media demand increased amid the pandemic.

It added that it is also holding talks for Walt Disney Co.'s video streaming service Disney+, although nothing has yet been confirmed.

Local telecom operators are currently negotiating with the U.S. media giant after its announcement last year that Disney+ would enter South Korea this year. LG Uplus currently offers rival service Netflix through its IPTV.

The company said it would focus on improving its wireless service this year, such as establishing more 5G coverage inside buildings, commercializing standalone 5G and finding business applications for the 28 gigahertz band.

Shares in LG Uplus rose 0.82 percent to 12,350 won, underperforming the broader KOSPI's 1.06 percent gain. The company announced its earnings for last year before the market's open.


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