LG HelloVision Q3 Operating Profit Plunges 97.5% Amid OTT Expansion, Business Restructuring
Operating revenue of 226.2 billion won, operating profit of 200 million won
"Improve profitability by stabilizing the cost structure"
Amid market changes, including the expansion of over-the-top (OTT) services, LG HelloVision's operating profit plunged 97.5% year-on-year in the third quarter of this year.
LG HelloVision said on November 4 that it recorded 226.2 billion won in consolidated operating revenue (sales) and 200 million won in operating profit in the third quarter. Sales fell 24.2% from the same period a year earlier.
The decline in performance is attributed to changes in the broadcasting market, including the expansion of OTT services and reduced use of video-on-demand (VOD), as well as a reorganization of the business portfolio to improve the company's business structure. LG HelloVision is currently working to improve its cost structure across the company, including through a recent voluntary retirement program.
Operating revenue by business segment totaled 208.9 billion won for the home business, 16.9 billion won for the regional business, and 400 million won for other businesses. Within the home business, broadcasting revenue was 120.4 billion won, internet revenue was 33.1 billion won, mobile virtual network operator (MVNO) revenue was 35.3 billion won, and rental revenue was 20.1 billion won. Broadcasting and MVNO revenue fell 1.9% and 8.9%, respectively, from the same period a year earlier.
The company said that, amid the market downturn, its broadcasting division focused on retaining subscribers. It added that performance in the rental division declined due to intensifying competition in the home appliance market and the streamlining of low-margin partner channels, while the regional business was affected by a drop in revenue from its electric vehicle charging business.
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"Amid rapid changes in the business environment, we are carrying out intensive efforts to improve our business structure and strengthen our fundamentals," said Kim Youngjun, an executive at LG HelloVision. "We will focus on stabilizing our cost structure and improve profitability by restoring our core competitiveness and pursuing qualitative growth."
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