Ayala-led telco slashes capex to P13.7 billion

CEBU, Philippines — Telecommunications giant Globe Telecom has slashed its capital expenditure (capex) for the first three months of 2024 to P13.7 billion, a 22 percent decrease from the same period of 2023.

According to Rizza Maniego-Eala, Globe’s Chief Finance Officer, this spending aligns with the company’s reinforced guidance of lower capex following peak levels reached in 2022.

“Our recalibrated capex strategy focuses on optimizing future investments to support the growing data requirements of our customers while ensuring we are on track to achieve our goal of being free cash flow positive by 2025,” said Eala, during the recently held first quarter 2024 Financial media briefing.

The first quarter investment is equivalent to 33 percent of Globe’s total service revenues for the quarter, significantly lower than the 44 percent recorded in 2023. It highlights Globe’s emphasis on capital efficiency while ensuring sustained growth and enhanced digital experiences for Filipinos, Eala said.

Approximately 91 percent of the first quarter capex was used for data network expansion and enhancements, ensuring Globe customers can access seamless digital experiences anytime, anywhere.

Eala explained that these investments primarily targeted Globe’s mobile network as the company shifted its fiber strategy from rollout and expansion to optimizing port utilization.

For full year 2024, Globe set a capex guidance of US$1 billion, lower than previous years, with projections to further limit spending to below US$1 billion by 2025.

The company’s capex-to-revenue ratio has gone down considerably, from 64 percent in 2022 to 44 percent in 2023, reflecting its commitment to capital efficiency.

This year’s capex is financed through a combination of operating cash flow, proceeds from asset sales, and a measured level of debt financing.

Globe’s capex approach enables the company to invest strategically in data network enhancements, ensure capital efficiency, and maintain its market leadership while delivering innovative digital solutions to its customers across the Philippines. — (FREEMAN)