LG Uplus (032640) Q4 2024 earnings summary

Executive summary

• Focused on strategic growth through AI and digital transformation, with a new vision as an AX Company and organizational changes under a new CEO.

• Emphasized customer experience, B2B expansion, and operational efficiency across all business segments.

• FY24 consolidated service revenue reached KRW 11.84tn, up 1.8% year-over-year, with wireless service revenue at KRW 6.12tn, up 2.2% year-over-year.

• Operating income declined 13.5% year-over-year to KRW 863bn, mainly due to increased amortization expenses on intangible assets.

• Strategic focus on digital-based distribution, AI-driven business structure, and B2B/B2C AI service expansion.

Financial highlights

• FY24 operating revenue was KRW 14.63tn, up 1.8% year-over-year; service revenue up 1.8% to KRW 11.84tn.

• Operating profit declined 13.5% year-over-year to KRW 863.1 billion, mainly due to increased amortization and one-off labor costs; excluding these, Q4 operating profit was flat year-over-year.

• Net profit dropped 44% year-over-year to KRW 352.9 billion, impacted by an impairment loss at LG HelloVision.

• EBITDA for FY24 was KRW 3.53tn, down 1.2% year-over-year; EBITDA margin at 29.8%.

• CapEx for 2024 was KRW 1.92 trillion, down 23.6% year-over-year, supporting improved free cash flow.

Outlook and guidance

• 2025 guidance targets over 2% consolidated service revenue growth and a profit turnaround via cost competitiveness and business structure improvement.

• Plans to focus on AX-centric and AI-driven growth, with selective resource allocation and bold restructuring of underperforming businesses.

• Dividend payout ratio for FY 24 was 64.7%, with a target shareholder return of 40%-60% of net profit in 2025, including potential share buybacks.

• Mid/long-term ROE target set at 8-10%.

• Debt ratio target of 100% as optimal capital position; flexible share buyback up to 0-20% of net profit.