Globe 1Q Revenue Growth at Record Level P31.1 Bln; Up 4% On-Year
Public Company Information:
Globe Telecom closed the first three months of 2017 with the record-level consolidated service revenues of P31.1 billion, 4% higher than same period last year’s P30.0 billion, and P62 million higher than prior quarter’s all-time high revenues.
The sustained solid revenue growth across all data-related segments, as well as the continued subscriber expansion for both mobile and broadband, led to this period’s strong performance. This was likewise aided by the company’s game-changing initiatives including a digital lifestyle play, innovative offers, and content partnerships with iconic global brands, backed by robust 3G and 4G networks nationwide.
“We are seeing encouraging improvements this quarter, despite the temporary setback on profits as we continue to lay down the foundation to secure sustainable growth in the future. Our continued aggressive network modernization and upgrades using the latest technologies are all geared towards enhancing our internet services, so that our customers can have a wonderful and seamless connectivity,” Globe President & CEO Ernest Cu said.
Mobile revenues stood at P23.8 billion as of end-March 2017, up 3% year-on-year, from the P23.1 billion reported a year ago. This was mainly attributed to the continued strong data consumption as more customers adopt the digital lifestyle. TM, the company’s mass-market brand, registered 7% revenue growth from last year, while Globe Prepaid revenues posted 3% improvement from 2016. Globe Postpaid revenues on the other hand, was flat year-on-year. Globe Telecom’s mobile subscriber base reached 58.6 million for the first three months of the year, up 2% from the 57.3 million subscribers reported in the same period of 2016.
On a product perspective, mobile data remains the biggest contributor to total mobile revenues, now reaching 42% as of the first three months of the year. Mobile data service revenues registered close to P10.0 billion for the three-month period just ended, or 8% higher than the P9.2 billion reported a year ago. Mobile data traffic grew 84% from 71 petabytes (PB) in the first three months of 2016 to 131 petabytes (PB) this period, as smartphone penetration now reached 63%. The continuous ramp up of data traffic and smartphone penetration only proves that Globe remains to be the network of choice of mobile data users. Mobile voice declined by 3% year-on-year while SMS increased by 3%.
The Globe home broadband business likewise showed consistent growth year-on-year, registering a total of P3.8 billion revenues as of end-March this year, up 9% from the P3.5 billion reported a year ago. Home broadband’s robust revenue performance was boosted by the continued subscriber expansion, which now reached 1.19 million as of the first three months of 2017. This was likewise aided by the strong take-up of home broadband’s latest plans and bundles which caters to the growing demand for lifestyle and entertainment-driven connectivity requirements such as video, gaming, information, commerce, shopping, and banking.
Globe Telecom’s corporate data business improved by 7% at P2.5 billion as of end March this year, higher from the P2.4 billion posted in the same period of 2016. This was mainly attributed to the rising demand for data connectivity, impacting customer base expansion, circuit count increase, and higher usage. Traditional fixed line voice revenues however, posted a decline of 2% from same period last year. The company’s record-level consolidated EBITDA stood at P13.3 billion, up 2% from same period last year. Total operating expenses and subsidy grew by 5% year-on-year to reach P17.8 billion from P17.0 billion last year, as Globe continued to invest in its data networks and support the growing subscriber base. EBITDA margin was at 43%, lower than the 44% margin reported a year ago but still higher compared to the 40% recorded in the fourth quarter of 2016.
Despite the sustained topline and EBITDA growth, the impact of higher interest expenses and depreciation charges from its network infrastructure investments, as well as the company’s share in equity losses and spectrum amortization related to the SMC telco asset purchase, weighed down Globe Telecom’s net income. Net income for the period declined 13% to only P3.8 billion from the P4.3 billion reported in the same period of 2016, as the charges related to the SMC telco asset purchase were not present in last year’s levels. The company’s core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, likewise declined by 12% year-on-year to reach only P3.7 billion from P4.2 billion in the first quarter of 2016.