LG U+ stands by Huawei as it reports strong results

LG U+ Logo. [LG U+]

LG U+’s chief financial officer said U.S. sanctions on its network equipment provider Huawei would not affect its services.

“We are aware that the Huawei issue is having a negative effect on our stock price,” said LG U+ CFO Lee Hyuk-ju during a Thursday conference call. “The issue itself is connected to the U.S.-China trade dispute, and even if it does move our stock prices, it does not affect our service.”

Around 30 percent of LG U+’s 5G coverage nationwide is provided by Huawei’s telecommunications equipment for which installation is nearly complete, Lee added.

“Equipment and part inventory for maintenance are secured as well, so providing service in the future will not be a problem,” he said.

LG U+ is the only Korean mobile carrier to use Huawei’s 5G equipment, which put it in the sights of the United States government. It has been pushing to have companies and entire countries rid themselves of Huawei equipment.

On Thursday, LG U+ reported third-quarter results, which beat analyst expectations.

Its net profit in the July-September period almost tripled on year, reaching 403.4 billion won ($358.1 million), driven by sales in mobile and smart home businesses.

Its operating profit was 251.2 billion won, up 60.6 percent from the corresponding period last year. Sales increased 5.9 percent from the previous year to reach 3,341 billion won.

“With the Covid-19 pandemic, content consumption and online purchases increased,” Lee said during the Thursday conference call.

Services, such as 5G and IPTV provided, increased on year by 14.4 percent to 2,650 billion won.

Revenue from IPTV basic fees, advertisements and home shopping increased 13.2 percent. Revenues generated by LG’s Giga internet services rose 11.6 percent on year, as more customers signed on to LG’s network. This follows the mobile carrier’s effort to diversify its 5G content offerings and smart home services, the company explained.

Revenues from LG’s business-to-business services rose by 2.7 percent, pushed by growing demand for cloud services from both large and small businesses.

The mobile carrier plans to strengthen its content offerings for different segments and said it will seek new business opportunities in segments that develop as a result of the government’s New Deal Initiative.

BY KANG JAE-EUN, SONG KYOUNG-SON [kang.jaeeun@joongang.co.kr]