Globe reports bigger profits in 2021 despite 'Odette' onslaught

MANILA, Philippines — Globe Telecom Inc. finished 2021 on a high note as earnings then finished better compared to its pre-pandemic performance, with the telco giant allotting higher capital expenditures this year to upgrade its infrastructure.

In a disclosure to the Philippine Stock Exchange on Wednesday, Globe reported its net income inched up 27% year-on-year to P23.7 billion in 2021, as economic conditions improved in the latter half of the year. The Ayala-led firm's service revenues grew 4% to P151.5 billion by the end of the year, beating 2019 levels by 2%.

The impact of super typhoon 'Odette' to Globe's bottom line severely hobbled earnings momentum in December as the firm spent P2.2 billion for refunds and impairment costs then.

However, Globe is still reaping the benefits from the work-from-home shift due to pandemic disruptions, especially in its mobile data and home broadband subscriptions segment. For 2021, the telco noted that revenues in the mobile subsector, accounting for 69% of service revenue, inched up 1% year-on-year to P103.7 billion by year-end.

Its home broadband segment raked in a company record-high P29.4 billion in revenues in 2021, expanding 10% year-on-year. This even surpassed 2019 levels by 35%.

"Our financial performance remained stable and posted healthy growth, enabling us to reinvest back into our network as customer data demands grow larger each year," Ernest Cu, company president and CEO, said.

"We invested P92.8 billion in capex for 2021 and have earmarked P89.0 billion for 2022, to give Filipinos better, more meaningful digital experiences," Cu added.

Globe's capex in 2021 was largely spent on building new cellular signal sites and upgrading sites for 4G and 5G capabilities then, as it reported 1,407 towers were constructed while upgrading some 22,300 towers. For 2022, the Ayala-led firm intends to spend that allotment for a more aggressive network rollout, such as connecting more households to fiber internet connections.

That said, the company's operating expenses rose as a result of its improved performance, now up 5% to P76.6 billion in 2021 compared to 2020 levels.

Globe also reported lower non-operating expenses in the final quarter of 2021 due to a P4.3 billion gain following its sale of investment in Mynt, the company's fintech arm which runs the digital wallet application GCash.

Earnings before interest, tax, depreciation and amortization — another measure of financial strength — inched up 2% to P74.9 billion in 2021, as the firm cited a 4% improvement in the company's topline. But adjusting for Odette's impact to earnings, Globe said "margin would have remained at 50%."

Shares in Globe gained 0.46% to close at P3,068 apiece on Wednesday.