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LGT reports second consecutive quarterly profit decline

19 Oct 2009

South Korean mobile network operator LG Telecom (LGT) has released its financial results for the three months ended 30 September 2009, posting a second consecutive decline in net income. LGT reported a 6.8% year-on-year drop in net income to KRW92.7 billion (USD79 million), down from KRW99.4 billion a year earlier, with the operator attributing the decline to increases in marketing costs as it looked to lure customers from rivals SK Telecom and KT Corp. Marketing expenses for the cellco in the three-month period were KRW276.6 billion, up 25% compared to KRW221.2 billion in 3Q 2008. Total revenue, however, rose 5.6% y-o-y to KRW1.27 trillion.

Last week LGT revealed that it had obtained board approval for a merger with sister companies LG Dacom and LG Powercom, with a proposed deal that will see LGT exchange one share for 2.15 Dacom shares or 0.74 Powercom shares. LGT hopes that the merger, which is expected to be completed on 1 January 2010, will help it reduce annual costs, including marketing expenses, by between 0.8% and 2% of revenue from 2010 to 2014.

South Korea, LG Uplus

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