Globe sets 2015 capital expenditure at P37.5B

MANILA, Philippines–Globe Telecom, the country’s second-biggest telecommunication company, is earmarking as much as $850 million (P37.5 billion) for capital spending this year to support growth after reporting record revenue and profit last year.

Globe, which said earnings last year were driven by gains across its core mobile, broadband and fixed-line businesses,  said part of this year’s capital spending budget included about $200 million that was unspent last year due to timing issues. As such, spending in 2014 reached P21.24 billion, the company said in the briefing materials it provided.

The bulk of the 2015 budget, or about 75 percent, will be used for data-related investments, such as the expansion of its LTE high speed Internet business where competition is expected to ramp up given the clamor for better services and the accessibility of inexpensive smartphones.

Globe said it would borrow to finance this year’s budget.  It noted that spending would help support continued growth as revenue this year was expected to increase by “high single” digit rate compared to the level in 2014.

Globe said core profit in 2014 was at an “all-time high” of P14.5 billion, up 25 percent over the level in 2013, while revenue hit P99 billion, up 9 percent from year-ago level.

The company’s core profit excludes the impact of accelerated depreciation and other non-recurring charges. Counting these, Globe said net income hit P13.4 billion, up 170 percent for the whole year. It said total Ebitda (earnings before interest, taxes, depreciation and amortization) also reached a record P39.3 billion, up 8 percent.

The company’s main mobile telephony revenue increased by 7 percent to P78.1 billion. During the period, Globe said mobile subscribers increased by 14 percent to 44 million.

That figure includes 2.3 million post-paid subscribers, who typically spend more. This contributed about 38 percent of revenue, the company’s filing showed.

Globe said it ended 2014 with 2.8 million broadband subscribers, higher by 37 percent from year-ago level.

Globe is owned mainly by Ayala Corp. and Singapore Telecommunications Ltd.