LG HelloVision posts W200m operating profit in Q3, down 97.5% on year

LG HelloVision posted operating profit of 200 million won ($149,000) in the third quarter of this year, as a slump in the pay-TV market driven by the spread of OTT services and a restructuring of its business portfolio weighed on earnings.

The company said Wednesday its third-quarter consolidated sales came in at 226.2 billion won, with operating profit at 200 million won.

Sales fell 24.2% from a year earlier and 7.0% quarter-on-quarter. Operating profit was limited to 200 million won amid an industry slowdown and cost burdens from business restructuring — a drop of 97.5% from the same period last year.

By segment, the home business recorded sales of 208.9 billion won. Broadcasting led with 120.4 billion won, followed by mobile virtual network operator services at 35.3 billion won, internet at 33.1 billion won and rental at 20.1 billion won. The regional business segment, which includes media and business-to-business operations, posted sales of 16.9 billion won, while other businesses contributed 400 million won.

Broadcasting and MVNO sales fell 1.9% and 8.9%, respectively, from a year earlier. LG HelloVision said market stagnation in the pay-TV and MVNO segments had weighed on its business.

The rental segment also saw sales decline due to intensifying competition in the home appliance market and the streamlining of low-margin affiliate channels. The regional business segment reflected lower revenue from local cultural projects and electric vehicle charging operations.

LG HelloVision said it plans to pursue a company-wide overhaul of its cost structure to improve profitability, and has recently carried out a voluntary retirement program as part of broader efforts to boost management efficiency.

"We are undertaking an intensive structural overhaul to strengthen our business fundamentals amid rapid changes in the operating environment," said Kim Young-jun, chief financial officer of LG HelloVision. "We will focus on stabilizing our cost structure and work to improve profitability through the recovery of core competitiveness and qualitative growth."