Globe income tumbles 29% despite record-high revenue

MANILA,  Philippines  —Albeit higher revenues, Globe Telecom Inc. ended 2023 with a 29-percent decline in its bottom line due to higher depreciation expenses as well as the absence of a one-time gain.

The telco giant announced on Wednesday its net income fell to P24.58 billion last year from P34.6 billion previously even after total revenue jumped by 3 percent to a record-high of P162.33 billion.

The bulk of the top line figures were accounted for by its mobile business, which grew by 5 percent to P112.38 billion in 2023. Average revenue per user (ARPU) in the postpaid segment was up 2 percent to P855 while prepaid business saw its ARPU improve by 24 percent to P120.

In 2022, a partial sale of a data center business also bloated income. Coming from a higher base and with depreciation expenses likewise rising by 4 percent to P47.36 billion last year, Globe saw its profits tumble.

READ: Globe Telecom sells 5,709 towers for P71B

“Given our huge capital expenditures (capex) in the last three years, we expect depreciation to increase for another three years,” Globe chief finance officer Rizza Maniego-Eala also said in a virtual briefing on Thursday.

The telecommunications giant shelled out about P265 billion in capex from 2021 to 2023. Spending also hit a record in 2022 with its P101.4-billion outlay. Having invested heavily on network infrastructure, capex then tapered off the following year, dropping by 30 percent to P70.6 billion.5G outdoor coverage.

READ: Globe to cut network spending next year after record investments in 2022

Globe built 1,217 new cell sites, upgraded nearly 7,000 mobile sites and installed 894 new 5G sites across the country. It now has 5G outdoor coverage of 97.9 percent in the National Capital Region and 92.36 percent in key cities in the Visayas and Mindanao.

This year, capex is set at $1 billion, which will be funded via internal cash flow, proceeds from tower sales and debts. By 2025, Globe targets to further cut down spending to below $1 billion.

For its tower deals, Globe has turned over nearly 60 percent of the 7,506 tower assets to buyers, cashing in P57.4 billion in total.

Globe estimates its revenues to grow by the low- to mid-single digit this year as it projects further demand.

“As we move forward to 2024, we are very optimistic that we will achieve continued growth by executing well on our customer-focused strategy and enhancing innovations using digital solutions backed by our firm commitment to network excellence,” Globe president and CEO Ernest Cu said. —Tyrone Jasper C. Piad