Globe Telecom Inc. projects low-to-mid single-digit service revenue growth this year as the economy recovers from the 2020 pandemic-induced recession.
Hence, the telco remains gung-ho on its P70 billion capex for 2021.
“We believe that the relevant product platforms in place, coupled with the aggressive investments made in the network, would allow revenues to increase by low-to-mid single-digit from 2020 level,” confirmed Chief Finance Officer Rizza Maniego-Eala.
Last year, the Philippines plunged into recession as gross domestic product (GDP) contracted 9.5 per cent after the government imposed the longest and strictest community quarantines in the world.
The slowdown eased with the GDP contraction of 11.4% in the third quarter and 8.3% in the fourth quarter when the National Capital Region (NCR) shifted to general community quarantine.
“Although the COVID-19 pandemic negatively affected the business, we are optimistic about regaining the momentum we have lost as the economy continues to recover,” she added.
The pandemic pulled down the telco's revenues across all its businesses, except for Home broadband, which sustained double digit growth as locked down Filipinos worked, studied, shopped and entertained themselves at home.
Nonetheless, Globe’s consolidated 2020 service revenues stood at P146.4 billion, down by just 2 per cent although net earnings dropped 16 per cent to P18.6 billion.
Consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) stood at ₱73.5 billion, 3% lower than 2019 due to the 2% contraction in service revenues.
EBITDA is a measure of a company’s overall financial performance used as an alternative to net income.
Globe's EBITDA margin also slightly weakened at 50% from last year’s 51%.
However, the telco believes it will be able to control its expenses and keep margins above the 50% threshold in 2021.
“EBITDA margin is expected to remain in the low 50s, as margins will be continuously impacted by the increasing contribution of lower-margin data-related products, but offset with efforts in managing costs,” Eala elaborated.
This year’s capital expenditures budget is 16% higher than last year’s P60.3-billion allocation and will be used for continued network expansion and enhancement, with increased allocation for the rollout of the fiber network and 5G footprints.
“In 2021 we have earmarked another record-level cash capital expenditure of P70 billion, to provide our customers with superior network performance and quality of service as we aim to deliver first-world internet connectivity for every Filipino,” according to Ernest L. Cu, Globe’s President and CEO.
“We remain optimistic that our strategy to focus on fulfilling the needs of our customers will drive our performance moving forward,” he underscored.
Globe is accelerating its cell site builds and upgrading existing sites with 4G/LTE and 5G technology as well as fast-tracking fiber rollout to the home.