Globe Telecom posts P15.3-B profit from Jan to Sept 2018

(INQUIRER File Photo)

An insatiable demand for mobile internet helped industry giant Globe Telecom achieve a big profit boost in the nine months through September this year even as capital spending went up.

Globe said in a stock exchange filing that core profit from January to September hit P15.3 billion, a gain of almost 37 percent over the same episode in 2017. Net income, which includes non-recurring charges, foreign exchange and mark-to-market charges, amounted to P15.2 billion against P13 billion last year.

The rise in internet-related services, in particular the mobile segment where Globe had placed much of its focus, is a key driver of its earnings. Globe said mobile data revenues surged 23.6 percent to P38.7 billion. This was faster than the 20 percent growth it saw during the same period in 2017.

Globe noted the rise in mobile was also bolstered by the 10 percent increase in its subscriber base to 65.4 million as of end-September this year. Mobile data traffic surged 49 percent to 641 petabytes.

Mobile data now accounts for 50 percent of gross service revenues versus 43 percent a year ago.

Globe cited investments in its 4G network, its content partnerships and rising demand for internet TV, music, and esports.

Globe noted that total mobile revenues, which include voice calls and text messaging, hit P77.7 billion, up about 6 percent. Total service revenues during the period amounted to P101.9 billion, up 7 percent.

Ernest Cu, Globe CEO, said in the filing that he expected the company to sustain the pace of earnings moving forward.

Meanwhile, Globe’s home broadband segment grew subscribers around 23 percent to 1.5 million. It said almost half of these were fixed wireless accounts. It said home broadband revenues hit P13.5 billion, up 15.4 percent while its corporate data business posted P8.4 billion in revenues, up 10.5 percent.

Globe also underscored its year-to-date capital spending of P32.5 billion to bolster its fixed and mobile networks. The figure, about 65 percent of its budget for the year, represented about a third of revenues. Spending includes widening its LTE network and upgrades for pilot 5G services in 2019.

Globe is also preparing for increased spending in the coming years, in part due to government’s initiative to invite a new mobile player that will add competitive pressure. Its board announced a reduction in its dividend policy to 60 percent to 70 percent of the previous year’s core profit. This will be applied to its 2019 dividend declaration. The previous policy was to pay out 75 percent to 90 percent of the previous year’s core income.

“The amended policy will provide Globe with increased flexibility with respect to capital management. This adjustment will also ensure the sustainability of the operations in this investment- heavy environment, while protecting future dividends, once planned expansion yields beneficial results,” Globe said in its filing. /cbb