Capex takes a toll on Globe’s bottom line

MANILA, Philippines — Globe Telecom Inc. suffered a 7-percent decline in its net income during the first quarter despite booking better revenues due to increasing demand for data from both mobile and enterprise segments.

In a disclosure on Tuesday, the Ayala-led company reported that its net earnings for the period dropped to P6.8 billion from P7.3 billion from the previous year due to “higher depreciation expenses and nonoperating charges.”

Total depreciation revved up 10 percent to P12.3 billion as of end-March because of “continuous capex (capital expenditure) investments.”

In the January to March period, Globe spent P13.7 billion in capital expenditures for data requirements.

READ: Globe income tumbles 29% despite record-high revenue

The company built 116 new cell sites and upgraded 812 mobile sites to LTE during the period.

Globe also deployed 27 new 5G sites, increasing the technology’s coverage to 98.35 percent of the National Capital Region and 92.86 percent of key cities in the Visayas and Mindanao.

Consolidated gross service revenues improved by 3 percent to P41.1 billion in the first three months, thanks to their mobile and corporate data businesses which accounted for 83 percent of the top line.

In particular, Globe said that mobile data revenues jumped by 10 percent to P23.8 billion as Filipinos grew accustomed to using mobile devices for online shopping, social media, and streaming, among others.

Mixed results

Globe’s corporate data business saw its revenue contribution also rise by 10 percent to P5 billion amid growing demand for connectivity in workplaces.

Home broadband revenues, however, slid down by 6 percent to P6.1 billion as demand normalizes following the boom during the pandemic.

To date, Globe has completed nearly 70 percent of its tower sale transaction, receiving P67.3-billion cash flow.

“We have put in place plans to ensure that the majority of the proceeds will come in by the first half of the year,” Globe president and CEO Ernest Cu said. “These moves put us in a solid position to meet the dynamic connectivity demands of our customers and stay at the forefront of the industry.”

In total, Globe sold 7,506 tower assets for P96.4 billion to several tower companies. Liquidating these assets allows Globe to raise funds for expansion plans and improve balance sheet health while leveraging the expertise of tower firms. INQ