Globe Q3 revenues slightly up

Published November 4, 2020, 11:47 AM

by Emmie V. Abadilla

Globe President and CEO Ernest Cu

Despite the double whammy of a pandemic and economic recession, Globe Telecom Inc.’s third quarter consolidated service revenues improved 3 per cent to P37 billion versus last quarter’s performance due to surging data demand.

However, the telco’s total revenues for the first nine months of 2020 dipped one per cent to P109.1 billion versus the same period in 2019.

Net income went down 10 per cent to P15.9 billion due to the drop in EBITDA and higher depreciation charges.

Similarly, core net income declined 13 per cent, year-on-year, from P17.9 billion.

Total data revenues across mobile, broadband and corporate data accounted for 75% of the telco’s total service revenues from 70% last year.

The increased data consumption of Filipinos shifting to more online activities and adopting new ways of working, learning, shopping, banking, and entertaining from their homes continues to drive the telco’s revenues.

“We are pleased with the performance Globe delivered this period, especially considering the extraordinary circumstances our country is facing,” confirmed President and CEO Ernest L. Cu.

“COVID-19 has changed the way we interact with our customers, suppliers and employees but at the same time has created opportunities for us to emerge from this crisis stronger,” he underscored.

Globe”s consolidated EBITDA stood at P56.3 billion, 3% lower than a year ago due to the 3% decline in operating revenues, but EBITDA margin remained at par with last year’s performance at 52%.

Mobile business revenues for the third quarter grew by 2% from P25.0 billion in the second quarter,bringing total revenues for the first nine months of the year to P77.3 billion, 6% lower than a year ago.

The improvement in the third quarter was due to the increasing level of prepaid top-ups and subscriber acquisitions, as Metro Manila and majority of the country was placed under General Community Quarantine.

Thid allowed more businesses to reopen and public transportation more widely available, thus increasing public mobility and enabling more Filipinos to return to work and earn their livelihood.

Globe’s total mobile revenues comprised 71% of the total service revenues, with total mobile subscriber base of 78.2 million.

From a product view, mobile data revenues generated P53.4 billion in the first nine months of 2020 from P52.1 billion of same the period last year, as consumers turned to online platforms to shop, telework, and connect with families and friends.

Mobile data now accounts for 69% of mobile revenues from 63% a year ago.

Mobile data traffic jumped from 1,200 petabytes in the first nine months of 2019 to 1,762 petabytes this period, or a 47% growth year-on-year.

Meanwhile, mobile voice and mobile SMS revenues ended at P15.3 billion and P8.6 billion, lower year-on-year by 16% and 29%, respectively, as the COVID-19 pandemic accelerated the shift to data-based services.

Home broadband posted a 22% year-on-year revenue growth to reach P19.5 billion this period.

Total home broadband subscriber base now stands at over 3.4 million, up 82% from the first nine months of 2019, driven mainly by the sustained increase of fixed wireless broadband users, now up by 119% from last year.

Home Prepaid Wi-Fi (HPW) likewise increased its traction with a 226% growth in users from the same period last year.

As of end-September of 2020, HPW data traffic soared to 352 petabytes from 77 petabytes in same period of 2019.

Corporate Data revenues, on the other hand, tapered by 3% year-on-year with total revenues of P9.3 billion as of end-September 2020, largely coming from lower domestic and international services.

This was partly cushioned by higher information and communication technology (ICT) revenues, given that enterprises are prioritizing their digital transformation now more than ever to thrive in this new normal.

Meanwhile, total operating expenses including subsidy posted P52.8 billion for the period, relatively flat year-on-year as the increases in provisions, subsidy costs and repairs and maintenance were muted by the declines from interconnection fees, services, utilities and rent.

Globe’s balance sheet remained strong despite the increase in debt from P136.3 billion in 2019 to P165.9 billion.

Globe’s gross debt to equity is at 1.92x while gross debt to EBITDA is at 2.29x; Net debt to equity ratio is at 1.54x while net debt to EBITDA is 1.84x; and debt service coverage ratio is at 3.45x.

Globe invested a total of P33.4 billion in capex for the first nine months of 2020, 4% higher than last year.

Majority of the capex investment, about 81%, went to data-related requirements, a testament to Globe’s commitment to expand its network and improve its service.

As of September, 2020, and despite quarantine protocols, Globe already exceeded its performance in terms of cell site upgrades by over 26% year-on-year.

These cell sites are now 4G or LTE ready to give its customers faster connectivity and better mobile experience.

Likewise, Globe is accelerating its 5G deployment and is now available in over 11 cities within Metro Manila.

“We remain committed to deliver our planned site builds for 2020, despite the varying degrees of community quarantines and our limited workforce out in the field,” Cu reiterated.

“With the easing of requirements, we were able to secure over 700 permits last August and September, which consists of both building and Certificates of Final Electrical Inspection (CFEI) permits. These permits complement our target network expansion and will help us continue the momentum of our aggressive cell site rollout.”