The Ayala Family’s telco released a teaser of its annual financial report yesterday.
The headline was about Globe's [GLO 3032.00 0.72%] record capex spending last year (over P92 billion), and what it calls the “sustained financial recovery in the second half of 2021.”
GLO’s consolidated service revenues climbed to P151.5 billion, up 4% from COVID-crippled 2020 and up 2% from its pre-pandemic level in 2019.
Net income was P23.7 billion, up 27% from 2020, but GLO does note that its 2021 net income, once normalized to remove one-offs like costs related to Odette, or its deemed sale gain on Mynt shares, or the effects of the CREATE Law, actually came in at P19.4 billion.
That’s down 15% from 2020.
If filtered to “exclude the impact of nonrecurring charges, and foreign exchange and mark-to-market charges”, GLO’s core net income was P21.2 billion, which is a 9% increase from 2020.
Subscribers rose to 86.7 million (up 13% from 2020), post-paid ARPU (average revenue per user) fell 3%, and pre-paid ARPU rose 7.8%.
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These teasers are a great way to get a very high-level feel for the full batch of data that would be contained in the actual annual report, but they are simply not a replacement for the insight that can be gained from the full picture.
They’re good to reduce the shock and uncertainty of the actual report, but I hate drawing any conclusions from cherry-picked stats based on reports that are not yet publicly available.
It was very interesting to see GLO prioritize network capex spending, network usage metrics, and network performance metrics, in the way that it did. The headlines were: (1) record 2021 capex, (2) lots of 2022 capex, (3) network speed keeps getting better, (4) financial results.
The body of the teaser followed the same progression. Perhaps this is part marketing, but it may also reflect an internal focus on spending and performance in the face of a hard-charging newcomer like Dito Telecommunity [DITO 6.20 6.35%], which recently made news boasting about doubling its planned 2022 capex to P50 billion.
Here, GLO makes sure we all see how it spent almost twice that amount last year, and that it plans to spend almost 80% more than DITO’s planned capex for the 2022 period.
Talk about 5G network roll-out has been a major staple of DITO’s marketing the past few months, so it was also telling that the first sentence in the section following the talk on capex is spent talking about GLO’s 5G network roll-out through 1,407 new 4G/5G towers, 22,300 upgraded mobile sites, and 2,000 5G outdoor/indoor sites.
I look forward to reading the full report, and starting the “telco scorecard” to measure subscribers, profitability, and 5G roll-out between GLO, SMART [TEL 1934.00 2.60%], and DITO.
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