LG Uplus posted its highest-ever quarterly operating profit, helped by growth in its AI data centre (DC) business and cost efficiency. Overall revenue fell, but service revenue and profitability improved.

LG Uplus said on Wednesday it posted second-quarter consolidated revenue of 3.69 trillion won, service revenue of 3.08 trillion won and operating profit of 344.5 billion won.

Revenue fell 3.9 percent from a year earlier, but service revenue excluding handset revenue rose 2 percent. Operating profit increased 13.1 percent, setting a new quarterly record.

The operating profit margin on service revenue was 11.2 percent, up 1.1 percentage points from a year earlier. It said growth in its enterprise infrastructure business, centred on AI DC, and ROI-driven cost efficiency lifted profitability.

Net profit for the period was 217.7 billion won, up 0.3 percent from a year earlier. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 5.9 percent to 1.03 trillion won, and the EBITDA margin increased 1.2 percentage points to 33.6 percent.

Enterprise infrastructure drives growth... AIDC revenue up 28.9 percent

Revenue from the enterprise infrastructure segment rose 8.6 percent from a year earlier to 464.4 billion won. AI DC business revenue, in particular, increased 28.9 percent to 124.1 billion won on growth in its colocation business.

Solution revenue, including AI contact centres (CC) and smart mobility, rose 6.8 percent to 134.6 billion won on higher relay messaging sales. Enterprise leased-line revenue rose 0.2 percent to 205.7 billion won.

LG Uplus is building a 200-megawatt AI data centre in Paju, which it said is currently the largest in the Seoul metropolitan area. It plans to open the first computing building in the first half of next year and to pursue design, build and operate (DBO) projects in parallel with building regional hubs to meet demand for AI infrastructure.

In the AICC business, the company focused in the first half on build-type projects centred on the financial sector, based on experience accumulated by applying solutions to its own customer centre with a workforce of 4,000. In the second half, it plans to expand its product line with solutions based on consultation advisers, automatic quality assessment (Auto QA) and large language models (LLM).

Mobile revenue also rises... 5G penetration at 84.9 percent

Revenue from the mobile segment rose 0.9 percent from a year earlier to 1.66 trillion won, helped by growth in subscriber lines and a higher share of 5G handset subscriptions. Mobile service revenue excluding access revenue increased 1.2 percent to 1.60 trillion won.

Total mobile subscriber lines were about 31,467,000, up 5.2 percent from a year earlier. About 536,000 lines were added net in the second quarter alone. Mobile network operator (MNO) subscriber lines were about 22,442,000 and budget carrier (MVNO) lines were about 9,025,000, up 7.2 percent and 0.4 percent, respectively. 5G handset subscribers were 9,548,000, up 6.9 percent from a year earlier. The share of 5G subscribers among all handset subscribers expanded to 84.9 percent.

LG Uplus introduced an integrated plan in May that consolidated 53 existing 5G and LTE plans into 18, along with an "All-in-One" product that allows customers to apply at once for mobile and internet subscriptions and bundle discounts. Last month, it also launched the "Iksio Roaming Call" service, which lets roaming plan subscribers make voice calls without additional international call charges.

Internet and IPTV subscribers rise... smart home revenue grows 4.3 percent

Revenue from the smart home segment rose 4.3 percent from a year earlier to 663.8 billion won, helped by growth in internet and IPTV subscribers.

Internet revenue grew 7.6 percent to 325.1 billion won on an increase in gigabit internet subscribers. Internet subscribers rose by a net 38,000 in the second quarter, increasing 3.6 percent from a year earlier to 5,677,000. IPTV revenue rose 2.1 percent to 337.7 billion won. IPTV subscribers were 5,776,000, up 1.3 percent from a year earlier.

LG Uplus launched a 200 Mbps internet plan reflecting increased data usage by users of its 100 Mbps product. It also introduced "U+tv Free5 for iPad," which allows IPTV viewing on iPads, strengthening the competitiveness of its smart home offerings.

LG Uplus, meanwhile, decided on July 29 to acquire an additional 90.0 billion won of treasury shares to enhance shareholder value. Since announcing its corporate value enhancement plan, the "Value-Up Plan," in November 2024, the company has cancelled about 180.0 billion won worth of treasury shares at book value.

It set this year's interim dividend at 270 won per share, up about 8 percent from a year earlier. The record date for the interim dividend is Aug. 13, and it plans to pay the dividend on Aug. 28.

CFO and CRO Myeong-hee Yeo (여명희) said, "We will turn the changes brought by the spread of AI into new growth opportunities," adding, "We will do our best to enhance corporate value while maintaining balance among future growth investment, financial soundness and shareholder returns."