Globe posts 9% revenue hike to P44.5B

MANILA, Philippines - Listed Globe Telecom Inc., a joint venture between conglomerate Ayala Corp. and Singapore Telecommunications Ltd, recorded a nine percent increase in revenues in the first half of the year on the back of double-digit growth in the number of subscribers.
Globe reported yesterday that its consolidated service revenues reached P44.5 billion from January to June this year or P3.7 billion lower than the P40.8 billion booked in the same period last year.
The growth in revenues was traced to the eight percent increase in mobile revenues to P35.8 billion, the 25 percent jump in broadband revenues to P5.1 billion, and the 12 percent rise in fixed line data business to P2.3 billion.
Globe reported a 14 percent increase in its subscriber base to 36.1 million in the first half of the year.
Amid the strong growth in revenues, the company’s net income fell 72 percent to P1.4 billion in the first semester from P4.9 billion in the same period last year due to higher depreciation charges with the completion of the company’s network modernization and transformation program.
Globe president and chief executive officer Ernest Cu said the company managed to booked robust performance in the first half of the year despite the ongoing network and information technology (IT) modernization initiatives and expects stronger competition in the second half of the year.
“We anticipate competition to escalate in the second semester given the gains we’ve realized in the past, and anticipated launches of in-demand mobile devices from Apple and Samsung in the second half of the year. We’ve built up great momentum during the first semester, and we need to strive harder to sustain it in this very competitive and fast paced environment,” Cu stressed.
As the company goes through its network modernization and IT transformation program, the accelerated depreciation charges related to the change-out of network assets and IT systems have become more pronounced, reaching P7.1 billion in the first six months of the year. Excluding said non-recurring charges and foreign exchange and mark-to-market gains and losses, core net income was up 13 percent from last year’s P5.7 billion to P6.4 billion.
In the first semester of 2013, Globe completed the first phase of the network modernization, changing out all of the network’s legacy access radios to state-of-the-art software defined radios (SDRs).
As a result of the change-outs, the increase in the accelerated depreciation charges related to the transformation projects, coupled with non-recurring transformation-related operating expenses incurred during the period, completely negated the year-on-year gains in EBITDA, resulting in consolidated net income after tax of P1.4 billion.