Industry giant Globe Telecom saw earnings in the nine-month period of 2017 weighed down by expenses related to its 4G infrastructure rollout, however, some relief came with the recent investment of Chinese tycoon Jack Ma into its fintech arm.
Globe announced that core profit from January to September declined by 5 percent to P11.2 billion compared to the same period last year. Core profit does not consider non-recurring and extraordinary items.
Depreciation expenses during this period jumped 16 percent to P20.1 billion as the company spent more to improve its network infrastructure. Globe also booked charges on “equity losses and spectrum amortization” related to its joint buyout with PLDT Inc. of San Miguel Corp.’s telco assets last year.
This spending, which Globe said would help bolster its 3G and 4G mobile internet services, came amid another period of strong growth. Globe said service revenues hit a new record after gaining 6 percent to P95.1 billion in the nine months to September.
It said the mobile business remained strong, led by a sharp increase in mobile data revenues.
The mobile business was up 7 percent in revenues for the period. Globe noted mobile data revenues, accounting for 43 percent of the pie, hit P31.3 billion, up 20 percent. This was on the back of better smartphone penetration and increased data traffic.
Its home broadband segment also grew. Home broadband was higher by 8 percent to P11.7 billion in revenues. Its corporate data business also increased 4 percent to P7.6 billion.
Healthy revenues and an investment by Ma’s Ant Financial Services Group and Ayala Corp., Globe’s owner, helped Globe book a net income of P13 billion, up 11 percent, during the period. Ma, one of Asia’s richest, is the founder of Alibaba, which owns Ant Financial.
Ant Financial and Ayala took a 45-percent and 10-percent stake, respectively, in Globe Fintech Innovations. Globe holds the remaining 45 percent.
According to Globe, Ant Financial and Ayala invested a total of $55 million (P2.8 billion). Globe, as a result of the deal value, booked a one-time gain of P1.89 billion from its stake in Globe Fintech.
So far this year, Globe has already spent about P36.8 billion in capital expenditures, 84 percent of which went to data-related initiatives. It earlier announced a plan to spend as much as $850 million or over P43 billion for 2017.
“As we focus more on the network improvement and differentiated customer experience, we expect to maintain our current momentum, and round out the year with a stable growth performance,” Globe CEO Ernest Cu said in a statement announcing the company’s earnings.