Globe Telecom Inc. reported a drop in profit in the first six months of 2017 as earnings were weighed down by expenses related to the acquisition of San Miguel Corp.’s telco unit last year.
In a stock exchange filing, Globe said core profit was down 10 percent to P8 billion while service revenue—led by mobile and fixed-line internet—went up by 5 percent to a record P62.9 billion.
Gains were crimped by higher depreciation charges. Globe said it spent more to rollout telco infrastructure following the acquisition on May 30, 2016 of SMC’s Vega Telecom, a P70-billion deal launched jointly with PLDT Inc., mainly to secure SMC’s valuable telco frequencies, including those in the 700 Megahertz band.
Globe also cited equity losses and spectrum amortization, given its expanded frequency assets, related to the Vega acquisition. The telco, held by Ayala Corp. and Singapore Telecommunications, said depreciation expenses in the first half of 2017 jumped 14 percent to P13.1 billion.
Removing the impact of the SMC deal, Globe said net income would have been down 4 percent during the six-month period.
For the second quarter alone, Globes’ core profit was down 7.7 percent to P4.29 billion compared to 2016 level, while service revenue went up 7 percent to P31.8 billion.
The telco sought to highlight gains from its core businesses in the first half of 2017. Its mobile revenue—42 percent from data— grew 5 percent to P48.3 billion even as its subscriber count slid 3 percent to 59.7 million.
Revenue of its home broadband segment rose 8 percent to P7.7 billion, as subscribers increased, while corporate data was up 3 percent to P5 billion. —MIGUEL R. CAMUS