LGU+, the largest operating profit since its establishment… “It is less than 1 trillion won due to the IT labor cost war” (2 reports overall)
Last year’s operating profit was 979 billion won and annual sales were 13.85 trillion won… Increase in 5G and budget phone subscribers
(Seoul = Yonhap News) Reporter Jeong Yun-ju = LG U+[032640]announced on the 28th that, based on its consolidated financial statements, its operating profit last year was 979 billion won, the highest since its establishment in 2010.
This is an increase of about 10.5% compared to the previous year (886.2 billion won), and the company said it was the best performance since its establishment.
However, last year’s operating profit was below the target of 1 trillion won, which the company had initially set.
LGU+’s chief financial officer (CFO) Vice President Lee Hyuk-joo said in a conference call on the same day, “In the fourth quarter of last year, about 65 billion won was abnormally reflected in labor costs. Their ‘war on labor costs’ was the cause,” he explained.
Vice President Lee said, “From the company’s point of view, we had to defend against the outflow of talented people, and to motivate our employees, we made the decision (in the form of paying labor costs) despite the operating profit of less than 1 trillion won. Considering that the related craze has passed, I think we will be able to manage the increase in labor costs sufficiently in the future.”
Sales last year were 13.85 trillion won, up 3.2% from the previous year. Net profit rose 51.5% to 724.2 billion won.
Operating profit in the fourth quarter was 158.2 billion won, down 9.8% from the same period last year. Sales and net profit for the quarter were KRW 3.61 trillion and KRW 111.8 billion, respectively.
The company’s wireless business sales last year increased by 4% compared to the same period of the previous year to record 6.547 trillion won.
The total number of wireless subscribers, including mobile communication (MNO) and MVNO, was 17,987,000 as of last year.
Marketing expenses decreased by 1.9% compared to the same period of the previous year to 2.857 trillion won, and CAPEX was 2.345 trillion won due to the construction of base stations to expand 5G coverage.
Smart home sales, including IPTV and high-speed Internet, increased by 9.5% year-on-year to KRW 2.23.7 trillion.
Corporate infrastructure business, including new businesses for businesses, IDC (Internet Data Center), and line business, recorded 1.49 trillion won in sales, up 10.7% from the previous year.
LG U+ also introduced an interim dividend system to enhance shareholder value and decided to raise the dividend payout ratio from above 30% to above 40% from this year. The total dividend per share also increased by 22.2% to 550 won compared to the previous year’s 450 won.
In response, Vice President Lee said in a conference call, “I would like to raise the dividend higher, but in order for LGU+, the third-largest operator, to have the same level of network as the first and second operators, there are some internal reservations, so we decided to set the dividend payout ratio to 40%. ‘ he replied.
There was also a question-and-answer response to a request for allocation of a 5G frequency 20 MHz width applied by LGU+ to the Ministry of Science and ICT (Ministry of Science and ICT).
Regarding the related question, LGU+ CR policy manager Park Kyung-joong said, “In terms of user convenience, we believe that there will be positive effects such as improving 5G service quality and improving the competitive environment in the mobile communication market.” I believe that the citizens of the whole country will be able to use 5G services with the same quality without discrimination anywhere.”
jungle@yna.co.kr
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