Globe Keeps Growth Momentum in 1H; Posts Double-Digit Growth in Revenues
"We are proud that the company’s overall results in the first half remained robust amidst the heightened competitive intensity and the unique challenges and opportunities posed by increasing levels of smartphone penetration and mobile postpaid ownership in the market."
Globe Telecom sustained its growth momentum in the first half of the year, delivering a double-digit hike in revenues, reaching a total P59.6 billion, up 11% from P53.8 billion a year earlier. Despite heightened competitive intensity, the robust revenue growth was underpinned by the rise in data-related service revenues across mobile, home broadband and corporate data, driven by efforts in providing market-relevant data offers and the sustained investments in the company’s data network.
Globe recorded net income of close to P9.0 billion, up by 3% against the P8.7 billion reported in the same period of 2015. Core net income, which excludes the impact of non-recurring charges, foreign exchange gains and mark-to-market charges, stood at P8.8 billion, higher by 2% year-on-year. EBITDA stood at P25.6 billion for the first six months of the year, a robust 13% increase from the P22.7 billion reported a year ago. Total operating expenses and subsidy grew by 9% year-on-year to P34.0 billion from P31.1 billion last year, to support the growing customer base and the expansion of the data network. EBITDA margin stood at 43%, slightly higher than last year’s margin of 42% and in line with the full-year guidance of 40%.
“We are proud that the company’s overall results in the first half remained robust amidst the heightened competitive intensity and the unique challenges and opportunities posed by increasing levels of smartphone penetration and mobile postpaid ownership in the market.” Globe President & CEO Ernest L. Cu said. “We believe that with the aid of the additional frequencies that we have recently acquired, Globe Telecom’s leadership as the preferred brand for Filipinos’ digital lifestyle choices will be strengthened moving forward. Our commitment in making continuous investments and the aggressive expansion of our network capacities are all geared towards addressing the public’s clamor for better internet service and creating wonderful experiences for our valued customers and shareholders.” Cu added.
Globe Telecom’s mobile revenues grew by 3% year-on-year, reaching P45.7 billion for the first half of 2016 from the P44.5 billion reported a year ago, driven by strong revenue performances of Globe’s prepaid brands. TM, the company’s mass-market brand, increased revenues by 5% year-on-year while Globe Prepaid revenues posted a solid year-on-year growth of 3%. Complementing the growth of the prepaid segment, Globe Postpaid revenues posted a 2% growth from the same period of 2015.
From a product perspective, the growth in mobile revenues was spurred by the sustained rise in mobile data service revenues, which grew to P17.8 billion in the first half of 2016, 46% higher than the P12.2 billion reported a year ago. The robust revenue growth was driven by the rise in smartphone penetration, on the back of increasing affordability and range of devices, and the popularity of Globe’s data-driven products and applications as more customers shift towards digital lifestyles. The growth in mobile data services offset the declines in mobile voice (-11%) and mobile SMS revenues (-16%), which are consistent with the trends in other telecom companies in the region and worldwide. Mobile data services comprised 39% of total mobile revenues, up from 27% in the first six months of 2015.
The company’s home broadband business likewise sustained its growth trajectory, significantly increasing both in revenues (+49% year-on-year) and subscriber base (+38% year-on-year). Total home broadband service revenues reached P7.0 billion for the six months just ended, with total subscriber base now reaching 1.14 million customers. The growth in revenues was driven by subscriber expansion in both fixed wireless and wired broadband solutions, due to the continued rise in demand for internet and data connectivity and the popularity of entertainment and other content-driven applications, such as HOOQ and NBA League Pass, among others.
Globe Telecom’s corporate data business surged by 55% to P4.9 billion for the first six months of 2016, from the P3.1 billion in the same period a year ago. This was primarily driven by the sustained demand for digital services across Philippine enterprises given the strong take-up of various data connectivity solutions, managed services, mobility solutions and cloud-based services. Traditional fixed line voice revenues likewise posted a 29% increase year-on-year to P1.9 billion as of the end of June 2016 from P1.5 billion a year ago following the growth of bundled home broadband plans.