LG Uplus posted strong results in the first quarter, with operating profit topping 270 billion won as all business areas, including artificial intelligence (AI) data centres, smart home and mobile, grew evenly. LG Uplus will boost operating profit through AI-based cost efficiencies while pursuing an active shareholder return policy to accelerate efforts to enhance customer value.

LG Uplus said in a regulatory filing on Wednesday that first-quarter operating profit on a consolidated basis rose 6.6 percent from a year earlier to 272.3 billion won. Operating revenue was 3.80 trillion won and service revenue, excluding handset revenue from operating revenue, was 3.04 trillion won, up 1.5 percent and 3.3 percent, respectively, from a year earlier.

Operating profit margin came to 9.0 percent, extending an improvement trend from last year. Net profit rose 8.4 percent to 176.0 billion won. The company highlighted even growth across all business divisions, including mobile, smart home and enterprise infrastructure, and cost management efforts focused on return on investment (ROI).

Revenue from the AI data centre business in the enterprise infrastructure division rose 31.0 percent from a year earlier to 114.4 billion won, playing a key role. Total revenue from the enterprise infrastructure division increased 6.3 percent to 435.6 billion won.

Moving beyond a colocation-focused model and expanding into DBO (Design·Build·Operate) services spanning design, construction and operations provided the foundation for improving its revenue structure. The company added data centre DBO to its articles of incorporation as a business purpose at this year's shareholders meeting. LG Uplus plans to continue identifying new AI-based businesses to expand mid- to long-term growth opportunities.

Ahn Hyung-kyun (안형균), head of LG Uplus' Enterprise AI Business Group, said large customers continued to place orders as AI demand grows, in comments on the outlook for the data centre business. He said revenue growth in colocation would continue this year through the Coramco Asset Management Gasan centre.

Kevin Jo (케빈 조), LG Uplus' chief strategy officer, said the company announced at this year's MWC a roadmap covering infrastructure and services based on the value of human-centred AI. He said it would secure stability and efficiency with 'Iksio Pro' for business-to-consumer services and autonomous networks and 'Iksio Guardian 2.0' for business-to-business services.

Its telecoms and home businesses also supported a solid earnings structure. Mobile revenue rose 3.2 percent from a year earlier to 1.65 trillion won on an increase in subscribed lines. Total subscribed lines were tallied at about 30,931,000. The number of 5G handset subscribers rose 11.0 percent to 9,473,000, lifting the 5G penetration rate to 84.2 percent of total handset subscribers.

Marketing costs increased. They rose 11.7 percent from last year to 614.2 billion won. Kang Jin-wook (강진욱), head of LG Uplus' Mobile and Digital Business Group, said the share of marketing costs versus service revenue rose slightly, but the company would improve spending efficiency to maintain a stable level in the mid to long term.

Smart home division revenue rose 4.1 percent to 656.3 billion won, helped by growth in gigabit internet subscribers. The IPTV business secured 5,767,000 subscribers while strengthening product competitiveness with offerings including the generative AI-based 'AI Shortcut' service, despite a difficult domestic environment. That was up 2.8 percent from a year earlier. LG Uplus plans to expand its base of high-value customers with differentiated content to pursue stable growth in the smart home business.

LG Uplus is also putting its full effort into companywide AI transformation, or AX. Yeo Myung-hee (여명희), LG Uplus' chief financial officer (CFO) and chief risk officer (CRO), said the company would improve operating efficiency by expanding AX at customer touchpoints. She said it would also expand AX-based automation for companywide common tasks to optimise its overall operating structure and lead to improved shareholder value.

LG Uplus will cancel all treasury shares worth about 80.0 billion won that it has repurchased since last year on May 15. LG Uplus also cancelled treasury shares worth about 100.0 billion won in book value in August last year.

Yeo, the CFO and CRO, said the company would make strengthening profitability in its core telecoms business a key task and systematically secure competitiveness in the AX business to build a stable earnings structure. She said it would consistently 추진 this strategic direction to accelerate mid- to long-term growth and continuously enhance corporate value.