Globe profit dips by 26 percent to P14.3 billion

MANILA, Philippines — Globe Telecom Inc. recorded a 26 percent profit drop in the first semester, forcing it to change its outlook for the rest of the year due to lingering macroeconomic challenges.

In its financial report, Globe said its income declined to P14.33 billion in the first half as the rise in expenses outpaced the growth in earnings.

Revenue rose by three percent to P89.52 billion, driven by an eight percent jump in the non-service segment and coupled with a two percent upturn from the service bracket.

On the other hand, expenses increased by four percent to P77.99 billion, as Globe registered a 10 percent spike in the cost of sales. It also attributed the profit reduction to the absence of one-time gains it made last year when it sold its data center business.

Moving forward, Globe adjusted its revenue outlook for the service bracket, expecting it to grow by just mid to low single-digit for the year. The Ayala-led telco admitted that its subscribers are taking a beating from price fluctuations even as inflation has winded down since the 8.7 percent peak in January.

“This adjustment takes into account the extended inflationary environment that has weakened the Filipino consumers’ purchasing power, coupled with continued decline in our legacy broadband business,” the telco said.

Further, Globe slowed its spending for capital expenditures by 25 percent to P37.69 billion in the first semester from P50.49 billion during the same period last year. The firm is slashing its capex to $1.3 billion this year from a record $1.9 billion in 2022.

In the face of a challenging economy, Globe president and CEO Ernest Cu is optimistic the mobile giant will accomplish its financial targets for the year, especially as it moves from a telco provider to a tech innovator.

“We were consistent in delivering revenue growth on our mobile and corporate data businesses, [and] more notably we outperformed the industry with the upbeat growth trajectory of our digital solutions platforms,” Cu said.