Globe profit growth slows

Globe Telecom Inc. said profit growth slowed in the first quarter of 2016 as it booked higher charges  related to the depreciation of assets and the consolidation of unit Bayan Telecommunications.

Globe said in a stock exchange filing Thursday that net income during from January to March this year hit P4.3 billion, up 3 percent year-on-year. Its core profit ended flat at P4.2 billion, compared to a core profit gain of 25 percent in the first quarter of 2015.

Consolidated revenue during the quarter rose 14 percent to P29.9 billion from year-ago level.

Globe said first-quarter depreciation expenses jumped by 40 percent to P6.2 billion. It cited one-time depreciation impact from aging assets, the consolidation of Bayan’s depreciation last quarter and charges from added assets related to its capital spending programs last year and in the first quarter of 2016.

It added that spending in the first quarter of 2016 reached P7 billion, mainly to meet the fast-growing demand for data services.

“Even as we face intense industry competition in the months ahead, we remain confident that we can achieve sustainable financial growth moving forward, with our continuous effort to innovate and improve the customer experience backed by the growing investment in network development to strengthen our leadership in the digital space.” Globe president and CEO Ernest Cu said in the statement.

Globe also highlighted gains it made from Internet services, a strong source of growth in the telecom sector, given the surging demand for smartphones.

Mobile revenue grew by 7 percent year-on-year to P23.1 billion in the first quarter of 2016,  driven by the strong revenue performance mostly from its prepaid brands.

Globe’s mobile subscriber base hit 57. 3 million during the period, up 18 percent. Globe said this came from strong gross acquisitions during the period despite the higher churn rates on Globe Postpaid and Prepaid brands. This, it said, was due to the one-time clean-up of non-paying customers as well as the impact of prepaid migration to the new business support system.