Globe Keeps Revenue Growth Momentum; 2017 Topline Up 6%
Public Company Information:
Globe Telecom recorded strong consolidated service revenues for 2017, ending the year with a topline of P127.9 billion, a 6% growth from last year and is the highest full year revenue level posted by the company.
The sustained revenue momentum was driven by the solid growth in data-related products brought about by the increasing popularity of streaming and on-demand video content. This was likewise enabled by the game-changing initiatives rolled-out by the company, including the promotion of the digital lifestyle, innovative and relevant offers and content partnerships, underpinned by a robust 3G and 4G network.
“We are pleased with the strong performance of the company this year, maintaining our momentum and posting positive full year revenue and EBITDA results,” Globe President & CEO Ernest Cu, said. “We are confident that our continued investments in our network’s data capacity and coverage, will allow us to continue to provide superior customer experience and improve the over-all connectivity in the country, while building a solid foundation to deliver sustainable long-term growth and shareholder value,” Cu added.
Mobile revenues grew 7% year-on-year, at P98.5 billion in 2017 from the P92.3 billion reported a year ago, driven by the continued mobile data revenue growth as more Globe customers embraced the digital lifestyle. Globe Prepaid and TM, the company’s mass-market brand, posted revenue growths of 11% and 8%, respectively, against the same period last year, while Globe Postpaid recorded a 1% increase year-on-year.
Globe Telecom’s mobile subscriber base reached 60.7 million as of end-December 2017, down 3% from the 62.8 million subscribers reported a year ago. The decline in the cumulative mobile customer base was due to the change in reporting of the company’s prepaid subscribers beginning 2017.
On a product perspective, mobile data remains to be the biggest contributor to total mobile revenues, increasing contribution to 44% against 38% a year ago. Mobile data service revenues reached P43.1 billion in 2017, 23% higher than the P35.0 billion reported a year ago. Mobile data traffic grew 66% from 361 petabytes to 600 petabytes in the year just ended, given the increasing demand for the company’s data-driven product portfolio. On the other hand, mobile SMS revenues were flat and mobile voice declined by 5% year-on-year. But on a normalized basis, mobile data revenues would have grown by 30% year-on-year while mobile SMS and voice would have declined by 7% and 4% respectively, as both products continue to be challenged due to the shift to internet-based applications, consistent with global trends.
The Globe home broadband business likewise sustained its growth momentum at P15.6 billion in 2017, increasing revenues by 7% year-on-year, with total subscriber base now reaching 1.3 million or 15% growth from a year ago. The solid growth in revenues was driven by the continued customer expansion in fixed wireless solutions, given the favorable customer response to the latest Globe home broadband plans. These latest plans provide customers value for money, with broadband bundles and customizable plans that suit the customers’ lifestyles.
Globe Telecom’s corporate data business likewise grew 4% year-on-year at P10.3 billion in 2017 from the P9.9 billion posted in 2016, due to the strong demand for data-driven solutions by corporates in the country. This increasing requirement has generated customer base expansion, circuit count increase and higher usage that contributed to the revenue growth in the corporate data business. Traditional fixed line voice revenues on the other hand, declined by 8% at P3.5 billion from a year ago.
Globe posted solid consolidated EBITDA, ending the year with P53.3 billion, up 7% from a year ago. Total operating expenses and subsidy grew in step with revenues, increasing by 6% year-on-year to P74.6 billion from P70.6 billion last year, as Globe continued to re-invest gains to support the growing customer base and the aggressive expansion of its data network. EBITDA margin was at 42%, higher than the previous year’s margin of 41%.
Despite the strong growth in EBITDA, the increased investments in the company’s data network pushed non-operating expenses and depreciation charges higher for the period, leading to Globe posting a 5% decline in net income at P15.1 billion, as against the P15.9 billion reported in 2016. The 2% increase in non-operating expenses was largely due to the increase in interest expenses and spectrum amortization related to the SMC telco asset acquisition. This, however, was partly offset by the recognition of a onetime gain last September, related to the increase in fair value of the retained equity interest of Globe in Globe Fintech Innovations.
Globe Telecom’s core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, likewise declined by 15% year-on-year to only P13.5 billion from P16.0 billion in 2016, with the full year impact of the SMC telco asset acquisition.