Globe reports lower income in 2020 but ramps up spending on network upgrade

MANILA, Philippines—Globe Telecom reported lower earnings in 2020 as the COVID-19 pandemic hit some of its largest business segments but increased its investment to improve service quality.

In a filing to the Philippine Stock Exchange on Wednesday (Feb. 10), Globe said core profit in 2020 dropped 13 percent to P19.5 billion as service revenues declined 2 percent to P146.4 billion compared to the previous year’s.

The company’s flagship mobile business saw revenues decrease 7 percent to P103.1 billion following the impact of stringent COVID-19 lockdowns.

Although mobile data traffic increased 48 percent, the telco giant ended the year with 76.6 million mobile subscribers or lower than 78.2 million subscribers the previous quarter.

Globe said the pandemic “impacted revenues across all businesses” except home broadband, which saw a banner year as revenues surged 23 percent to P26.8 billion after employees and students were confined in their homes.

“2020 was a challenging year for Globe but we pulled through despite the COVID-19 pandemic and adverse economic environment,” Globe CEO Ernest Cu said in a statement.

“Our prudent financial management in these turbulent times allowed us to maintain strong cash flows, giving us the flexibility to continue to invest back into our network,” he added.

Globe said on Wednesday its reported net income, which includes non-recurring charges, declined 16.6 percent to P18.6 billion. Margins weakened as the company set aside provisions for lower payment collections during the pandemic.

During this period, Globe ramped up spending to upgrade its mobile and fixed-line networks.

Total capital expenditures in 2020 hit P60.3 billion, higher by 18 percent year-on-year.

This was equivalent to 41 percent of its gross service revenues for the whole year.

Globe plans to spend P70 billion in 2021 to build and upgrade cell sites and install more fiber lines.

“This record-breaking capital expenditure supports Globe’s continuous modernization of its network to make 5G as well as fiber technology available to customers in more areas in the country,” Globe said in its statement.

TSB