Globe revenues up 4% to P79B; income up 51% to P20B in H1 2022

With mobile and corporate data products and services powering growth, Globe Telecom Inc. hauled in ₱78.9 billion revenues in the first half of 2022, up 4 percent year-on-year, above the growth rates before the pandemic.

Total data revenues rose to 81 percent of total service revenues from 79 percent last year.

The telco’s net income reached ₱19.7 billion, 51 percent higher than the ₱13.0 billion reported in the similar period in 2021.

Total non-operating income of ₱6.5 billion as of the first semester this year was mainly due to the one-time net gain of ₱8.5 billion (post-tax) on the partial sale of Globe’s data center business reported last quarter.

Excluding this one-time gain, normalized net income would have been ₱11.2 billion, or up by 4 percent year-on- year.

Accordingly, core net income, which excludes the impact of non-recurring charges, and foreign exchange plus mark-to-market charges, ended at ₱11.0 billion for the period.

Similarly, normalized core net income went up 1 percent year-on-year.

“We are happy that the Globe Group’s performance accelerated solidly in the first half of the year, rebounding our topline to pre-COVID levels,” remarked

Ernest L. Cu, President and CEO.

Globe’s balance sheet remained healthy and gearing comfortably within bank covenants despite the increase in debt from ₱185.5 billion as of end-June 2021 to ₱240.0 billion this period.

Globe’s gross debt to equity is at 1.91x while gross debt to EBITDA at 2.59x; Net debt to equity ratio is at 1.81x while net debt to

EBITDA is 2.46x; and debt service coverage ratio is at 4.05x.

Significantly, Globe reinvested 64 percent of its revenues for the first half of the year back to its network infrastructure to improve customer experience.

Globe’s capex to revenue ratio remained elevated and is still among the highest reinvestment ratios in Asia.

Globe closed the first half of 2022 with ₱50.5 billion capital expenditure (capex), surpassing last year’s spending by 17 percent.

The bulk of the capex, 84 percent, was allocated for data requirements to meet consumer’s growing demand for data.

This amount also represents 57 percent of the ₱89 billion capex earmarked for this year to further build its fiber assets, put up more cell sites, upgrade towers to 4G LTE, and roll out 5G technology and in-building solutions.

To support Globe’s various business initiatives, total operating expenses including subsidy stood at ₱38.3 billion for the first half of 2022, or flat year-on-year.

The increase from almost all expense line items were offset by the declines from marketing and subsidy as well as lease.

Globe’s mobile business revenues likewise posted a 3 percent year-on-year growth reaching ₱54.0 billion from the ₱52.6 billion generated in the similar period of 2021.

The revenue increase came mostly from the prepaid brands spurred by more consumer mobility with the easing of pandemic related restrictions in the country.

Total mobile revenues comprised 69 percent of the total service revenues, with the total mobile customer base expanding to 87.4 million, or 7 percent higher from the year earlier.

From a product perspective, mobile data revenues grew by 8 percent to reach ₱41.8 billion in the first half of the year from ₱38.6 billion in the same period of 2021, as the new normal pushed more people to the digital world and accelerated Filipinos’ digital adoption.

Thus, mobile data traffic jumped to 2,177 petabytes as of end-June this year, beating the 1,761 petabytes reported in the similar period.

Mobile data now accounts for 77 percent of mobile revenues from 73 percent from the same time last year. Meanwhile, mobile voice and mobile SMS revenues ended at ₱7.8 billion and ₱4.4 billion, lower year-on-year by 15 percent and 8 percent, respectively.

Home Broadband business dipped further in the second quarter, bringing its total revenues for the first half of 2022 to only ₱13.8 billion from ₱14.5 billion a year earlier.

This period’s result however was still better than pre-pandemic levels. The 5 percent drop in Home Broadband revenues was still driven by the continued transition and migration of broadband subscriber base, particularly HPW subscribers, to Fiber.

Corporate Data revenues sustained its double-digit growth of 21 percent generating a historic-high of ₱8.2 billion this period from ₱6.7 billion from the same time last year.

This outstanding performance was powered by the uptick from information and communication technology (ICT) and international leased line services.

Growth from ICT was largely from business application services, cloud solutions, and cybersecurity services.

Complementing the gains from the telco core products and services, Globe’s non-telco businesses are growing at a rapid pace, with its revenue soaring to ₱1.9 billion in the first half of the year, up 118 percent from the corresponding period of 2021.

The revenue increase was again contributed by Adspark, Yondu, and Asticom. This remarkable progress brings Globe closer to its vision of going beyond telco to empower the Filipino digital lifestyle.

Globe continues to lead the country’s charge towards digital transformation by providing digital solutions in healthtech, fintech, adtech, ecommerce, e-learning, and entertainment, among others.

GCash, the fintech platform operated by Mynt, now has 66 million registered users, with 5.2 million merchants and social sellers, and around 520 GLife merchant partners.

GCash is the only e-wallet with a full suite of financial services including cash loan and buy now pay later products. At present, GCash is the only Philippines’ double unicorn valued at over $2 billion.

Other portfolio companies under Globe’s corporate incubator, 917Ventures, include telehealth service platforms KonsultaMD and HealthNow. 917Ventures also has adtech company AdSpark, loyalty, and ecommerce solutions provider RUSH, and online grocery shopping platform PureGo, a cloud based multichannel communications platform M360 and iNQUiRO which offers suite of data-driven products and solutions designed to create value for enterprises and their customers.

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