Globe Telecom full year profits climb on subscriber gains, data usage

12 Feb 2019

Globe Telecom, the Philippines’ largest mobile network operator (MNO) by subscribers, recorded strong profit and data growth in FY 2018 on the back of a solid increase in its subscriber base. Net income in 2018 rose 21% year-on-year to PHP18.6 billion (USD356.9 million) and consolidated service revenue increased 3.9% to PHP133.0 billion. Further, the telco noted that when stripping out the impact of a move to a new accounting standard (PFRS), its service revenue amounted to PHP140.2 billion, up 10% when compared to FY 2017, which it attributed in the main to strong demand for data-related services across all its business segments.

The MNO also reported that based on pre-PFRS accounting methodology, its full-year mobile revenue rose 9% y-o-y to PHP107.0 billion, within which mobile data contributed PHP43.1 billion (28%), accounting for 51% of gross service revenue, compared to 44% in FY 2017. Mobile revenue derived from voice/SMS both continued to fall, however, dipping 6% and 8% y-o-y to PHP30.3 billion and PHP21.3 billion, respectively. Globe added a net 13.4 million mobile subscribers in 2018 to close out December with a total of 74.1 million – a market share of 53%. In addition, the Ayala-led telco reported 1.6 million home broadband subscriptions (24%), of which ~976,000 are ‘home wireless’ subscribers.

Capital expenditure in FY 2018 stood at PHP43.3 billion, up 1.9% on an annualised basis, a figure that is expected to climb to PHP63.0 billion in FY 2019 – with four-fifths set aside to bolster its data capabilities. Globe president and CEO Ernest Cu confirmed the operator’s intention to spend 45% more in CAPEX this year to address data traffic growth and support its ongoing 4G LTE rollout. Cu said: ‘We are proud of what we have achieved in 2018 both in terms of financials and network expansion. 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.’

Echoing Cu, Globe CFO Rizza Maniego-Eala noted that the company will finance the capital expenditure programme through a mix of internal cash and debt. ‘Through our operating cash and also through additional debt for 2019,’ she told reporters during the press conference, adding that: ‘Any borrowing will be pushed towards the latter part of the second quarter. We continue to review the rates and availability of liquidity of the market.’

Philippines, Globe Telecom (incl. Innove)