Globe Telecom Inc. closed the first three months of 2022 with a net income soaring 86 percent to P13.7 billion as consolidated service revenues reached ₱39.2 billion, surpassing pre-pandemic level.
In a report, Globe said that its revenues registered a four percent increase versus the same period last year, surpassing pre-pandemic levels on the back of its data business, as more users went online to work, learn, do business transactions and entertain themselves.
With higher EBITDA and lower non-operating expenses, which fully offset the increase in depreciation charges, the telco's net income soared 86 percent to ₱13.7 billion.
Lower non-operating expenses this period was mainly due to the net gain of ₱8.5 billion on the partial sale of Globe’s data center business.
Excluding this one-time gain, normalized net income would have been ₱5.1 billion, or up by 2 percent year-on-year.
Accordingly, core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, ended at ₱5.1 billion for the quarter. Similarly, normalized core net income was kept flat year-on-year.
“We are pleased with our performance in the first quarter, as the top-line growth momentum was sustained," summed up President and CEO Ernest L. Cu.
"We saw encouraging results particularly in the mobile business as the government continuously eased pandemic restrictions and the economy opened up. We are likewise optimistic about the growth prospects for the new ventures in Globe’s expanding portfolio. We believe that our ceaseless innovation through various digital platforms, backed by the growing investment in our data network will strengthen our leadership in the digital space," he elaborated.
Overall, Globe invested a total of ₱21 billion in capital expenditure (capex) in the first quarter of this year, 10 percent more than the same period in 2021.
The bulk, 82 percent of the capex went to data-related requirements to handle the surge in demand for digital services and to provide a higher level of digital experiences for its customers nationwide.
As a result of these investments, Globe built 234 new cell sites nationwide, upgraded over 3.5 thousand mobile sites, and installed 380 new 5G sites as of end-March of 2022.
In the fixed line front, Globe installed over 470 thousand Fiber to the Home (FTTH) lines.
The telco's mobile business revenues as of end-March of 2022 improved by 2 percent from last year’s ₱26.3 billion mostly coming from the prepaid brands.
Total mobile revenues comprised 69 percent of the total service revenues, with total mobile subscriber base now reaching 87.4 million, or 10 percent higher from the year earlier.
From a product view, mobile data revenues posted ₱20.8 billion in the first three months of 2022 from ₱19.2 billion in the same period last year, as Filipinos regain mobility amid easing pandemic restrictions.
Mobile data now accounts for 78 percentof mobile revenues from 73 percent a year ago.
Also, mobile data traffic soared to 1,058 petabytes as of end-March this year from 836 petabytes the previous year, which translates to a 27 percent year-on-year growth.
Meanwhile, mobile voice and mobile SMS revenues ended at ₱3.9 billion and ₱2.1 billion, lower year-on-year by 17 and 11 percent, respectively.
Home Broadband business however showed a 4 percent year-on-year decline from the ₱7.4 billion generated as of end-March of 2021 to only ₱7.0 billion as of end-March this year, though still better than pre-pandemic levels.
The decline in Home Broadband revenues was largely due to the continued transition and migration of broadband subscriber base, particularly HPW subscribers, to Fiber.
This decline in Fixed Wireless Product fully offset the sustained growth from the fixed wired segment.
Total Home Broadband subscriber count now stands at 3.5 million or down by 15 percent year-on-year.
As of end-March of 2022, HPW data traffic likewise declined to only 138 petabytes from 211 petabytes in the year earlier.
On the other hand, the strong commitment of Globe to deliver fiber technology to more homes in the country resulted to an increase in fiber revenues and fiber subscribers against last year by 165 and 155 percent, respectively.
Corporate Data revenues posted a double-digit growth of 18 percent to reach an all-time high ₱3.9 billion this period from ₱3.3 billion a year ago.
This solid revenue performance was mainly driven by the growth frominformation and communication technology (ICT) business, supported by the sustained growth of domestic services. Improvement in ICT revenues came mostly from business application services and cloud solutions.
Globe’s strategic shift to becoming a digital service platform likewise started to bear fruit, with revenues growing 252 percent year on year.
Total non-telco revenues from subsidiaries amounted to ₱791 million for the first three months of the year, close to 3 times larger than the level posted in the same period of 2021.
This also marks the first quarter that non-telco services have shown significant contribution to the topline driven by the growth across most of its subsidiaries, particularly Adspark, Yondu, ECPay, and Asticom.
Meanwhile, Globe posted total operating expenses including subsidy of ₱19.5 billion for the first three months of 2022, relatively unchanged from same period last year.
This period’s higher spending on utilities, interconnect costs, staff costs, maintenance and services was fully offset by lower ads and promo, leases, provisions and taxes.
Consolidated EBITDA for the first three months of the year stood at ₱19.7 billion, up 8 percent versus the same period of 2021 due to the 4 percent improvement in the topline and the relatively flat operating expenses and subsidy.
Thus, EBITDA margin for the period rose to 50 percent from last year’s 48 percent.
Globe’s balance sheet remained strong and gearing comfortably within bank covenants despite the increase in debt from ₱210.1 billion as end-March 2021 to ₱217.7 billion this year.
Globe’s gross debt to equity is at 1.75x while gross debt to EBITDA is at 2.40x; net debt to equity ratio is at 1.63x while net debt to EBITDA is 2.24x; and debt service coverage ratio is at 7.06x.