Globe Telecom net profit drops 16% in 2020, but Home Broadband revenues climb

10 Feb 2021

Globe Telecom reported that service revenues reached PHP146.39 billion (USD3 billion) in 2020, down 2% from PHP149.01 billion in the prior year, as net profits tumbled 16% to PHP18.62 billion exacerbated by a 38% drop in the fourth quarter alone to PHP2.74 billion, due mainly to the impact of the pandemic and the extended quarantine restrictions on all business segments except for Home Broadband. Revenues in that segment rose 23% year-on-year to PHP26.80 billion, offsetting drops of 7% for Mobile service revenue, to PHP103.11 billion, 2% for Fixed Line Voice (PHP2.62 billion), and 3% for Corporate Data (PHP12.54 billion). Full-year EBITDA fell to PHP73.51 billion from PHP76.03 billion in 2019, as the EBITDA margin narrowed 1pp to 50% and core net income – which excludes the impact of non-recurring charges, one-time gains, foreign exchange gains and mark-to-market charges – dropped by 13% to PHP19.52 billion. Total cash capital expenditures in 2020 stood at PHP60.3 billion, 18% higher than 2019’s level of PHP51.0 billion, about 86% of which was spent on data networks, with Globe noting a specific focus on ‘increasing capacity, cell site upgrades and fast-track fiberisation of Filipino homes nationwide for a better internet experience’.

The telco built out close to 1,300 new cell sites or cell towers in 2020, up from 1,100 built in 2019, and also upgraded 11,529 sites to 4G LTE (2019: 10,135) and rolled out its new 5G network to a total of 1,045 sites nationwide. In FY21, Globe has set aside PHP70 billion in CAPEX to continue an aggressive cell site rollout programme, in the process upgrading all sites to 4G. The operator closed out December 2020 with a total of 76.646 million mobile subscribers on its books, down 19% y-o-y, noting that churn levels rose sharply for its pre-paid brands Globe Prepaid (churn up 1.7pp to 4.8%) and TM (up 3.3pp to 6.2%), while Globe Postpaid churn increased to 1.8% from 1.7% previously, due to the continued normalisation ‘from the impact of the one-year load validity regulation’. Fixed broadband subscribers stood at 3.797 million at end-2020, up from 2.017 million twelve months earlier as fixed-wireless connections soared 122% to 3.058 million.

Philippines, Globe Telecom (incl. Innove)