Globe Telecom Inc. over the weekend scaled back its earnings guidance this year on the back of higher inflation and weak sales from its legacy broadband business.
Instead of “mid-single digit growth,” the Ayala-led telco bared service revenue guidance of “mid-to-low single digit growth” from 2022 levels.
“This adjustment takes into account the extended inflationary environment that weakened the Filipino consumers’ purchasing power coupled with the continued decline in our legacy broadband business,” Globe said.
Globe’s revised guidance also incorporates the impact of the SIM card registration that diminished its subscribers to 53,727,798 from 86.74 million.
Globe booked a net income of P7.1 billion in the April to June period, down 2 percent from P7.3 billion in the same period last year.
This brought Globe’s first half net income to P14.37 billion, down 27 percent from last year’s P19.68 billion.
Globe blamed the decline in net income to increased depreciation expense as well as the 78 percent decline in non-operating income, which was due to the one-time net gain of P8.5 billion (post-tax) reported last year from the partial sale of Globe’s data center business.
Excluding this one-time gain, normalized net income would have been P10 billion, or down 11 percent compared to the previous year.
Core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, closed at ₱9.9 billion for the period or up 22 percent on a sequential basis.
Year-on-year, however, core net income similarly was down by 10 percent.
“The Globe Group continues to perform well during the first half of the year, despite facing macroeconomic challenges,” Ernest Cu. president and chief executive of Globe said.
“We were consistent in delivering revenue growth on our mobile and corporate data businesses. More notable, we outperformed the industry with the upbeat growth trajectory of our digital solutions platforms” he added.
Globe consolidated service revenues rose 2 percent to a record P80.4 billion for the first half of 2023 showing stable revenues year-on-year, backed by the data revenue growth across mobile and corporate data businesses.
Mobile business revenues as of end-June 2023, stood at ₱54.8 billion or higher by 1 percent compared to ₱54 billion a year ago, while Home broadband revenues dropped to P12.8 billion from P13.8 billion.
Globe said the drop in the legacy and fixed wireless products was offset by the sustained expansion in postpaid fiber subscribers and revenues, growing 10 percent and 23 percent, respectively.
Additionally, total Home Broadband subscribers now stand at 2.2 million or down by 31 percent versus last year.
Globe’ capital expenditures for next year amounted to $1 billion, lower from about $1.3 billion this year.
The company invested P37.7 billion in capex in the first six months, 2 5 percent lower than the similar period of 2022.
Globe built 542 new cell sites, and upgraded 5,087 mobile sites to LTE as of June 2023, in order to meet the rising data demands of its customers.
The company also deployed around 148 thousand fiber-to-the-home (FTTH) lines, significantly lower than last year’s rollout to maximize the utilization of its existing fiber inventory.
As of the first half of 2023, Globe has fired up 356 new 5G sites across the Philippines, increasing its 5G outdoor coverage to 97.44 percent of the National Capital Region and 91 percent of key cities in Visayas and Mindanao.
