LG Uplus (032640) Q2 2024 earnings summary

Executive summary

• Service revenue for Q2 2024 grew 1.6% year-over-year to KRW 2.94 trillion, with mobile, smart home, and enterprise infrastructure all contributing to growth.

• Launched new brand slogan emphasizing AI-driven digital transformation and introduced ixi-GEN, a generative AI model specialized in telecommunications.

• Established a joint venture with Kakao Mobility for EV charging (VoltUp/Bolt Up), with each party investing KRW 25 billion, and acquired land for a new hyperscale IDC in Gyeonggi Province.

• Mobile subscriber base reached 27.22 million, with 5G handset users accounting for 67.7% of total handsets.

• Focused on internalizing AI technology to enhance customer value and operational efficiency.

Financial highlights

• Q2 2024 consolidated revenue was KRW 3.49 trillion, with service revenue up 1.6% year-over-year and mobile service revenue up 1.7% to KRW 1,520.1 billion.

• Q2 consolidated operating profit was KRW 254 billion, down 11.8% year-over-year but up 15% quarter-over-quarter; net profit was KRW 164.6 billion, down 22.8% year-over-year but up 26.2% sequentially.

• EBITDA for Q2 2024 was KRW 920.2 billion, up 0.4% year-over-year; EBITDA margin at 31.3%.

• Smart home revenue up 2.5% year-over-year to KRW 618.2 billion; enterprise infrastructure revenue up 5.4% to KRW 431.5 billion.

• Q2 2024 CAPEX was KRW 557 billion, down 15.8% year-over-year but up 44.7% sequentially.

Outlook and guidance

• Management targets 2% year-over-year growth in standalone service revenue for 2024, with continued focus on digital transformation and platform business expansion.

• Plans to complete the Paju hyperscale IDC by 2027 to meet growing AI and cloud demand.

• Ongoing investments in AI, cloud, and EV charging infrastructure expected to drive future growth.

• Enterprise infrastructure business to focus on top line growth, especially in IDC, SOHO, and AICC segments.

• Key AI projects in B2C and B2B to drive future growth and corporate value.