Globe sees profit surge in Q1 2019

MANILA, Philippines — Globe Telecom reported stellar results in the first quarter of 2019 as profitability surged on sustained demand for its data services while expenses were contained, the company said in a regulatory filing on Monday.

Globe, owned by Ayala Corp. and Singapore Telecommunications Ltd., said core profit for the three month period hit P6.7 billion— up a whopping 40 percent over the same period in 2018.

Service revenues— driven by its mobile business— jumped 13 percent to P36 billion.

Globe was also successful in controlling spending during the period, as operating expenses and subsidies rose 1 percent to P16.1 billion. This helped Ebitda margin rise to 55 percent from 50 percent in the same period in 2018.

Capital spending for the period amounted to P8.8 billion, or 14 percent of its full-year budget.

“I am delighted to report another remarkable performance for the first three months of 2019 with revenues and margins growing beyond our expectations,” Globe president and CEO Ernest Cu said in a statement.

“For 2019, we are confident in our ability to maintain this strong growth momentum with the aggressive investments in the network,” he added.

Globe said its growth was driven by gains across “all” of its data-related services and products as well as its array of content partnerships.

Mobile was the biggest driver as revenues here increased 11 percent to P27 billion. Of that figure, Globe’s mobile data business accounted for the lion’s share at 61 percent, in part, as demand doubled to 370 petabytes in the first quarter compared to a year ago.

Globe said home broadband grew 21 percent in terms of revenues while its corporate business rose 16 percent. Mobile voice and text messaging, in line with industry trends, declined by 15 percent and 22 percent, respectively.

For the rest of the year, revenues could ease to the “high single- digits”, Cu said. Margins were also seen at around 50 percent for the full year due to the “increasing contribution of the lower-margin data-related products.”

Globe is also expected to launch next generation 5G services, on a commercial pilot basis, for the home broadband market by June this year.

“Through this launch, we will be able to offer our customers a whole new ecosystem of devices to enhance the way they experience data to the home,” Cu said. /je