Globe profit up 12% to P6.4B in first half

Globe Telecom, a partnership between the Ayalas and Singapore Telecom, kept its growth momentum in the first half of the year as it posted net earnings of P6.4 billion, 12 percent more than a year earlier, as the national elections in May increased the frequency of text and calls on its mobile phone network.

In a statement, Globe said core earnings, which exclude foreign exchange and mark-to-market gains and losses and the non-recurring bond redemption costs in the first half, reached a record P7.4 billion.

Consolidated service revenues hit a new peak of P31.6 billion, an 11 percent year-on-year improvement, driven by continued growth from both wireless and wireline segments.

Margins remained at a healthy 66 percent, taking earnings before interests, taxes, depreciation and amortization (EBITDA) to P20.9 billion and earnings before interests and taxes (EBIT) to P12.6 billion for the first half of the year.

“We are very happy with the excellent results we achieved in the first half of the year. We believe that these were made possible by Globe’s good-value customer offerings in the midst of a strengthening economy. We also benefited from heightened demand for communications services arising from election-related activities,” said Globe president and chief executive officer Gerardo Ablaza Jr.

The first semester was marked by solid subscriber growth of 30 percent from a year ago, resulting in a wireless subscriber base of 18.1 million. The Globe brand contributed 1.2 million net additions, while Touch Mobile (TM) accounted for 1.3 million.

On the other hand, the company’s wireline business posted revenue growth despite the adverse impact of a stronger peso. This is due to the accelerated expansion of its broadband segment where subscribers tripled from last year, boosting this segment’s revenue growth by 92 percent.

Globe carried out key initiatives and programs in its core mobile business during the first semester. It introduced value-priced SIMs at P65 for Globe and P30 for TM, while it continued to offer bulk voice and unlimited text promos, stimulating overall usage by both new and existing subscribers. The company also continued to expand its sales and distribution capabilities, growing its Autoload Max base to over 560,000 active retailers.

During the first semester, the company undertook network infrastructure investments amounting to P5.8 billion. This is part of the $350 million capital spending allotted this year for capacity building in both the cellular and broadband businesses.

As part of its continuing efforts to enrich the customer’s mobile experience, Globe formed a strategic alliance with Yahoo!. With this partnership, Globe became the first Asian operator to offer Yahoo!’s innovative OneSearch service. This enables Globe subscribers to search the Internet easily and conveniently through their mobile phones.

Anchored on its commitment to enriching lives through ease and relevance, Globe recently unveiled its new brand identity. Its new logo, called “Globe Life”, is intended to reinforce Globe’s promise to serve customers better by offering products and services that are relevant in their daily lives, and easy to use.

“We are very excited with our new brand identity and the change that it embodies not only for the whole Globe organization, but more importantly for the customers that we serve. It signifies our renewed commitment to put our customer first, ”Ablaza said.

In its meeting yesterday, and in accordance with its 75 percent dividend payout policy, Globe’s board of directors declared the second semi-annual cash dividend in 2007 of P33 per common share payable to stockholders of record as of Aug. 29, 2007. A total of P4.36 billion in dividends will be paid on Sept. 14, 2007.