Globe posts P18.6-B net earnings, up 22%, from P132.9-B sales

By Emmie V. Abadilla

As subscribers continued to favor data-related services across all business segments, Globe Telecom Inc. netted P18.6 billion earnings, up 22 per cent, on consolidated service revenues of P132.9 billion (post-PFRS) for 2018, up 10% year-on-year, the company yesterday disclosed.

Globe President and CEO Ernest L. Cu Globe President and CEO Ernest L. Cu

The telco ended last year with a core net income of P18.7 billion, excluding the impact of non-recurring charges and foreign exchange and mark-to-market charges.

Globe’s total operating expenses and subsidy amounted to P67.7 billion for the period, leading to consolidated EBITDA ending at P65.1 billion, with an EBITDA margin of 49%.

As of end-December, 2018, mobile revenues grew to P99.5 billion, up 9% from a year ago. From a product perspective, mobile data revenues reached P50.8 billion.

Mobile data continued to be the top contributor to the telco’s mobile business, and now accounts for 51% of gross mobile service revenues from 44% a year ago.

This was propelled by the sustained higher prepaid top-ups, with more consumer spending on mobile data, thus driving the mobile data traffic growth from 600 petabytes last year to 956 petabytes in 2018.

Meanwhile, mobile voice and mobile SMS revenues stood at P28.5 billion and P20.2 billion, respectively.

Mobile voice revenues posted P30.3 billion, or down 6% year-on-year while mobile SMS revenues totaled P21.3 billion, or lower by 8% versus 2017.

Globe’s home broadband business ended the year with total revenues of P18.6 billion due mainly to the continued subscriber expansion in fixed wireless solutions, in particular the growing popularity of the Home Prepaid Wifi product.

Corporate data business totaled P11.8 billion in revenues in 2018, largely attributed to a higher circuit base, given the increasing demand for fast, reliable and secure internet connectivity, as well as modern business solutions, that help enterprise clients to advance their businesses.

In terms of capex, Globe spent P43.3 billion or about $821 million capital expenditures in 2018 to address the robust data traffic growth and support its increasing customer base with the ramped-up Long Term Evolution (LTE) rollout.

About 77% of the total capex for 2018 was for data-related services, all geared to meet the customer demand for more bandwidth-intensive content.

In line with the company’s continued expansion and enhancement of its data network, full year 2019 cash capex is expected to reach P63.0 billion or approximately $1.2 billion.

Mobile subscriber base totaled 74.1 million as of end-December 2018, which will now become the new baseline given the impact of the regulatory requirement which extends prepaid load validity to one year regardless of amount.

Total home broadband subscriber base grew 24% from last year and now stands at over 1.6 million, of which around 61% are home wireless subscribers.

“We are proud of what we have achieved in 2018 both in terms of financials and network expansion,” says Ernest L. Cu, President and CEO of Globe Telecom Inc.

“We have met our minimum broadband coverage commitment. We will continue to build our network capacities to improve the internet experience as we re-invest our gains back to our network, which is now close to 33% of our revenues, to be able to deliver a differentiated level of customer service.”

In compliance with the directive of the National Telecommunications Commission (NTC), all telephone numbers of Globe customers in Greater Metro Manila (MM) with 02 area code will move to an 8-digit format on March 18, 2019.

This directive is to ensure there will be sufficient resource pool to cater to the rapid growth of landline customers in major cities.

The commission assigned a public telecommunications entity (PTE) identifier for telecom operators as an additional prefix in expanding from 7-digit to 8-digit landline number. The assigned PTE identifier for Globe and its subsidiary Innove is “7.”

Lastly, Globe's Board of Directors yesterday approved, the declaration of the first quarter 2019 cash dividend of P22.75 per common share payable on March 13, 2019 to shareholders on record as of February 26, 2019.

The first quarter cash dividend payment total is about P3.0 billion.