Globe Q1 net profit down 2%; revenues, EBITDA both stable

5 May 2020

Full-service operator Globe Telecom has published its financial results for the three months ended 31 March 2020 with net profit dipping 2% year-on-year to PHP6.595 billion (USD130.3 million) from PHP6.730 billion, in part due to ‘sustained network investments’, which resulted in an increase in depreciation and non-operating charges. As the Filipino telco navigates the challenges presented by a local ‘enhanced community quarantine (ECQ)’ in Luzon – to contain the spread of COVID-19 – it also noted that core net income declined 3% to PHP6.560 billion from PHP6.732 billion, but revenues and EBITDA were stable at PHP41.181 billion (up 1%) and PHP20.476 billion (up 3%), respectively; EBITDA margin was 56%, up 1pp when compared with 1Q19.

In a statement, Globe claimed its ‘digital transformation over the last five years paved the way for the company’s resilience during the COVID-19 pandemic’ and that despite ‘the limitations brought about by the ECQ in Luzon’, it had continued to invest in its network, spending PHP10.7 billion in the first quarter, 22% higher than in 1Q19 and representing 29% of gross service revenues. The monies were largely committed to ‘data-related’ requirements (about 68%), as Globe sought to provide its customers with stable data connections amid the lockdown. It did note, however, that ‘given the full impact of the ECQ and the delays the company is experiencing with its network rollout, CAPEX guidance for the second quarter will likely be lower by at least PHP2.0 billion from the first quarter CAPEX spend’.

Operationally, Globe closed out March 2020 with a total mobile subscriber base of 89.320 million, up 7% from 83.489 million at end-March 2019, the majority of which – 86.599 million (up 7%) – were pre-paid. Average monthly post-paid ARPU stood at PHP858 (down 7%), while pre-paid ARPU also fell, by 2% on an annualised basis to PHP91 and PHP57 for its ‘lobe Prepaid’ and ‘TM’ PAYG brands, respectively. Average monthly churn climbed by around 3pp for pre-paid, but was trimmed from 1.5% to 1.4% for contract accounts. Further, the company noted that its home broadband business generated revenue of PHP5.780 billion in 1Q20, up 11% y-o-y and 2% quarter-on-quarter, as the fixed broadband base climbed 32% on an annualised basis to 2.259 million, including wired (645,225) and fixed-wireless (1.613 million) connections.

Commenting on the results, CEO Ernest Cu said: ‘I am pleased to report that Globe remained resilient and posted healthy results in the first quarter, despite going into enhanced community quarantine (ECQ) in the last two weeks of March. While we are grateful for our recent achievement, we understand that this is not reflective of our performance moving forward’.

Philippines, Globe Telecom (incl. Innove)