Globe bullish on bouncing back from first-semester blues
REUTERS FILE PHOTO
MANILA, Philippines — Globe Telecom’s recovery in the second quarter failed to lift its first-semester performance. Its earnings dropped by 14 percent due to higher depreciation and operating costs.
In a disclosure to the local bourse on Wednesday, the Ayala-led telco said its net income fell to P12.4 billion from P14.53 billion.
This, despite the group logging a strong P2.6-billion gain from MUFG Bank Ltd.’s acquisition of an 8 percent stake in Mynt. The latter is the parent firm of the leading e-wallet GCash.
READ: MUFG buy-in deal jacks up Gcash valuation to $5B
Normalized net income, excluding the one-off gains, fell 16 percent to P10 billion.
Total costs and expenses, including depreciation charges, inched up by one percent to P64.5 billion.
Consolidated gross service revenues dipped by 2 percent to P80.2 billion from P82.2 billion a year ago.
Contributions from its mobile business went down to P57.1 billion from P58.4 billion. Extreme heat and transport strikes witnessed in the first quarter restricted mobility and limited on-the-go data usage.
READ: Globe first-half profit slips 14% to P12.4 billion
Traditional segments
Globe also noted that traditional voice and SMS services continued their “downward trajectory,” as Filipinos prefer tapping mobile data.
Despite “persistent inflation” affecting consumer appetite, Globe said the number of mobile data users rose to 37.8 million.
The telco also ended June with 62.5 million mobile subscribers, up 5 percent from 59.5 million a year ago.
Globe’s home broadband unit also provided lower contributions at P11.7 billion. This was down 3 percent from P12.1 billion, with more subscribers shifting to fiber from fixed wireless service.
Corporate data revenues also fell by 2 percent to P9.6 billion on “cautious business sentiment.”
Further, Globe’s share in Mynt’s equity earnings during the period jumped to P3.8 billion from P2.1 billion.
Nontelco revenues, on the other hand, saw a 2 percent decrease to P1.2 billion.
Recovery expected
Cash flow as measured by earnings before interest, taxes, depreciation and amortization stood at P42.1 billion.
Although Globe recorded weaker financial results, it remains optimistic about bouncing back, as evidenced by its second-quarter rebound.
Globe said core earnings in the April to June period rose by 30 percent to P5.9 billion from P4.5 billion.
“Our second quarter performance underscores the growing impact of our cost and operational efficiency efforts,” said Carl Raymond Cruz, president and chief executive officer of Globe.
“The sequential growth in revenues, core net income, stable margins and rising contributions from Mynt reflect not just financial discipline but the operational strength of our entire organization,” Cruz said.
Meanwhile, in a separate disclosure, Globe said it was eyeing raising up to P25 billion through the issuance of nonvoting preferred shares.
