by Jan Michael Carpo, Reporter
Globe Telecom, the Ayala-led telecommunications giant, continues to show resilience and adaptability in a rapidly changing market, reporting a modest 1% increase in net income to P14.5 billion for the first half of 2024, compared to P14.4 billion in the same period last year.
The slight uptick, although minimal, underscores the company’s robust financial health amidst evolving consumer behavior and market challenges.
Globe earnings bolstered by strong EBITDA growth
Globe’s earnings before interest, taxes, depreciation, and amortization (EBITDA) played a crucial role in stabilizing its bottom line, effectively counterbalancing the rise in depreciation expenses.
In its statement to the Philippine Stock Exchange (PSE), Globe highlighted that its normalized net income would have been P11.9 billion, representing a significant 19% year-over-year increase, excluding a one-time gain from the sale of its tower assets.
Further emphasizing the company’s operational strength, Globe’s core net income, which excludes non-recurring expenses, foreign exchange losses, and mark-to-market charges, surged by 18% year-on-year to P11.7 billion in the first half of 2024.
Had ECPay, Globe’s former electronic payments platform, been excluded from its 2023 records, the core net income would have shown an even more impressive 21% growth.
In 2023, Globe Telecom Inc. obtained a P20 billion borrowing facility from BDO Unibank Inc. to settle its debt and finance expansion initiatives. According to Globe, the credit facility’s profits will be used to cover capital expenditures and loan repayments that are about to expire.
Mobile Data and Corporate Services Lead Revenue Growth
Despite facing a dip in non-telco and home internet services, Globe reported consolidated gross service revenues of P82.2 billion, marking a 2% increase from the previous year. This growth was primarily driven by the mobile and corporate data segments, reflecting the company’s successful strategic pivots.
Globe’s mobile division, a critical revenue driver, posted all-time high revenues of P58.4 billion as of June 2024, a notable increase from P54.8 billion in the same period in 2023. This growth was fueled by the continued consumer preference for Globe’s products and services, reflecting the success of the company’s market repair strategies and its commitment to maintaining superior network quality.
Within the mobile segment, data revenues reached new heights, hitting P48 billion in the first half of the year, with a record-breaking P24.2 billion generated in the second quarter alone. This 9% year-over-year growth was largely attributed to the Filipino population’s increasing reliance on mobile applications for activities such as social media engagement, media streaming, and e-commerce. The widespread adoption of smartphones has further accelerated this trend, solidifying mobile data as a key revenue stream for Globe.
Conversely, traditional mobile voice and SMS revenues saw declines of 2% and 6%, respectively, reflecting the broader industry shift towards data-centric services.
Corporate Data Services: A Pillar of Stability
Corporate data services also demonstrated strong performance, with revenues climbing 8% year-over-year to P9.8 billion as of June 2024. The growth in this segment was driven by increased demand for information and communication technology (ICT) solutions and core data services, which grew by 9% and 7%, respectively.
This performance highlights Globe’s ability to cater to the evolving needs of its corporate clients, offering robust digital solutions that are integral to their operations in an increasingly connected world.
Challenges in Home Broadband and Non-Telco Segments
However, not all areas of Globe’s business experienced growth. Residential broadband revenues fell by 6% year-over-year, dropping from P12.8 billion to P12.1 billion by the end of June 2024. The decline was primarily due to a reduction in fixed wireless services.
Despite this downturn, postpaid fiber services continued to show steady growth, now accounting for 85% of home broadband income. A 3% increase in postpaid fiber subscribers and corresponding revenues helped to mitigate the overall decline in home broadband revenues.
Globe’s non-telco sales faced a significant 58% year-over-year decline, plummeting from P2.8 billion at the end of June 2023. This sharp drop was largely driven by the deconsolidation of ECPay, following the sale of Globe’s 77% stake in the platform to Mynt in September 2023. However, when adjusting for the deconsolidation of ECPay in the first half of 2023, Globe’s non-telco revenues would have shown a more moderate 26% decline.
Navigating a Shifting Landscape
Globe Telecom’s performance in the first half of 2024 underscores its ability to navigate a complex and shifting telecommunications landscape. The company’s strategic focus on core services like mobile data and corporate solutions, coupled with its efforts to maintain network excellence, has enabled it to sustain growth amidst market challenges.
As Globe continues to adapt to the changing needs of its customers and the broader market, its strong financial performance, particularly in the mobile and corporate data segments, positions the company well for continued success in the latter half of the year.