In 2013, Globe revenue up 9% to P90.5B
MANILA, Philippines—Globe Telecommunications Inc., the country’s second-biggest telecommunications provider, reported that its core earnings rose in 2013 as revenues across its business segments grew, but the company noted challenges in the coming year.
Globe said in a stock exchange filing that core profit was up 13 percent to P11.62 billion last year, as revenue gained 9 percent to P90.5 billion.
But its reported net income declined by 28 percent to P4.96 billion on non-recurring depreciation charges due to the company’s massive network and IT upgrades. The company said it booked non-cash accelerated depreciation charges of P9.1 billion, up 78 percent, last year.
The telco also reported a 13-percent increase in operating costs and subsidies to P54 billion, mainly driven by subscriber acquisitions and recontracting costs amid intense competition.
“For 2014, the company expects the market to be more challenging and competition to remain intense, but more rationale on the ground,” Globe said in its filing.
Most of the company’s revenue still came from the mobile business, which grew 8 percent to P72.8 billion in 2013. During the period, the company added that its total mobile subscriber base was up 16 percent to 38.5 million. Broadband subscribers increased 22 percent to about two million, it said.
Globe expects revenue to continue to grow this year.
Growth will be supported by a capital investment budget of up to $650 million, which will be spent on transformation projects, and the upgrade of its data network, including high-speed Internet and fixed broadband.
It also noted that debt levels, while elevated, would remain within loan covenants while its dividend payouts would be “sustained at competitive levels.”
“We have said in the past that 2013 is a transition year, and the most critical period for Globe, given the network and IT modernization projects we undertook through the year while competing in a fast evolving market,” Globe president and CEO Ernest Cu said in a statement.
The company also cited softer revenue in the fourth quarter of 2013, a traditionally strong period for the telco business, due to the devastation caused by Super Typhoon Yolanda.
Globe noted that gross revenues in the fourth quarter of 2013 were up 2 percent to P23.2 billion. It said higher expenses, however, caused profit during the three-month period to decline by 32 percent to P1.4 billion, while core profit also dipped by a third to P2.1 billion.
Globe, which spent P29 billion in capital investments last year, said the first phase of its network modernization was “fully complete” by the end of 2013.
