LG Uplus posted its highest-ever quarterly operating profit, helped by growth in its AI data centre (DC) business and cost efficiency. The company said it will continue to drive earnings growth by responding to AI demand based on group synergy.

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 rose 13.1 percent, setting a quarterly record.

The operating profit margin on service revenue was 11.2 percent, up 1.1 percentage points from a year earlier. The company said profitability improved on growth in its corporate infrastructure business centred on AI DC and cost efficiency focused on return on investment (ROI).

Net profit 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.

Yeo Myung-hee (여명희), LG Uplus chief financial officer and chief risk officer, said this year’s capital spending (CAPEX) is expected to increase from a year earlier. She said AI DC investment will be carried out under the company’s value enhancement plan without separate external financing.

On annual guidance, she said service revenue on a separate basis in the first half is running above the 2 percent guideline presented at the start of the year. She said wireless revenue growth is expected to slow in the second half compared with a year earlier, but the company can sufficiently achieve its annual guidance.

AI DC revenue rises 28.9 percent as Paju centre to meet infrastructure demand

LG Uplus’ second-quarter corporate infrastructure revenue was 464.4 billion won, up 8.6 percent from a year earlier. AI DC revenue rose 28.9 percent to 124.1 billion won, helped by growth in its colocation business.

Revenue in its solutions segment, including AI contact centres (CC) and smart mobility, rose 6.8 percent to 134.6 billion won due to higher relay messaging revenue. Corporate line revenue was 205.7 billion won, up 0.2 percent.

LG Uplus is building a 200-megawatt Paju AI data centre, currently the largest in the Seoul metropolitan area. It plans to open its first computing building in the first half of next year and respond to AI infrastructure demand by pursuing design-build-operate (DBO) business while building local hubs. The company said market demand is large relative to DC supply, making it possible to improve profitability compared with existing data centres.

For its 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 in-house customer centre of 4,000 staff. In the second half, it plans to expand its product line with counselling advisors, automatic quality assessment (Auto QA) and large language model (LLM)-based solutions.

Kevin Cho (케빈 조), LG Uplus chief strategy officer, said on AI business synergy combined with group capabilities that LG Group will advance AI infrastructure and create new value based on its "One LG" strategy. He said it will upgrade the value chain by linking with LG AI Research’s EXAONE and others.

LG Uplus drew a line on concerns about overlapping business with LG CNS. Jung Young-hoon (정영훈), head of corporate AI business at LG Uplus, said on Wednesday that the two companies’ business models differ. He said LG Uplus is a provider that offers integrated DC and network services, and is also pursuing DBO business to expand DC capacity.

Mobile revenue also rises as 5G adoption reaches 84.9 percent

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

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

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

Internet and IPTV subscribers rise as smart home competitiveness strengthens

Smart home revenue rose 4.3 percent from a year earlier to 663.8 billion won, helped by increases in internet and IPTV subscribers.

Internet revenue rose 7.6 percent to 325.1 billion won due to an increase in gigabit internet subscribers. Net additions of internet subscribers in the second quarter were 38,000, lifting total subscribers 3.6 percent from a year earlier to 5,677,000. IPTV revenue rose 2.1 percent to 337.7 billion won. IPTV subscribers rose 1.3 percent to 5,776,000.

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

LG Uplus also decided on July 29 to acquire an additional 90 billion won worth of treasury shares to enhance shareholder value. Since announcing its "Value-up Plan" for corporate value enhancement in November 2024, the company has retired treasury shares worth about 180 billion won at book value.

The company set its interim dividend at 270 won per share, about 8 percent higher than a year earlier. The record date for the interim dividend is Aug. 13, and it plans to pay the dividend on Aug. 28. The company said it will continue to maintain a direction of enhancing corporate value and expanding shareholder returns.

Yeo said the company will turn changes brought by the spread of AI into new growth opportunities. She said it will do its best to enhance corporate value while maintaining a balance among future growth investment, financial soundness and shareholder returns.