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MANILA – November 11, 2013 – Globe Telecom posted a core net profit of P9.5 billion in the first nine months of the year, a 9 percent rise from last year’s P8.7 billion.
According to Globe, the increase came despite the complexity of an ongoing network and IT modernization initiative amid a highly competitive environment.
The increase in core net profit was driven by stronger revenues, totaling P67.3 billion for the nine-month period, or an increase of 10 percent from P61.3 billion a year earlier. Revenue growth continued to be broad-based, with the mobile, broadband and fixed line data businesses delivering solid year-on-year results of 8 percent, 22 percent and 12 percent respectively.
“Our third quarter results show that the company’s growth momentum is still intact and that we competed well despite the complexity of the ongoing transformation projects. We continued to deliver solid top-line growth, fueled by the robust performance of our mobile, corporate data and broadband businesses,” said Globe president and CEO Ernest L. Cu.
“As we’re starting to reap the benefits of our new modern network and IT systems, we are well-prepared to meet the industry’s future challenges. We will remain focused in constantly innovating and finding new ways to deliver a differentiated customer experience and create more value for our shareholders. These are the imperatives that will keep us ahead for the rest of 2013 and beyond”, Cu added.
Mobile revenues rose 8 percent to P54.1 billion from P49.9 billion a year ago, once again led by the postpaid segment which surged 20 percent year-on-year.
The company’s strategy to grow the postpaid subscriber base remains sound as the absolute increase in postpaid revenues alone for the first nine months of 2013 was double the absolute investments in subsidies and re-contracting costs made for new and existing subscribers through the same period.
Meanwhile, the prepaid segment grew 3 percent over the same period, despite the continued pressures on yields caused by the popularity of value-based bucket and unlimited offers and the prevalence of multi-SIM incidence in the market. Total subscriber base reached 36.5 million as of end-September, up 14 percent versus the same period in 2012.
Broadband revenues leapt 22 percent to P7.8 billion for the nine months ended on the back of the market’s positive response to the company’s wide portfolio of wireless and wired broadband products that were made more affordable and relevant to subscribers. Globe closed the first nine months of the year with 1.9 million broadband subscribers, up by 15 percent from last year, with both fixed DSL and nomadic broadband segments registering growths of 17 percent and 14 percent, respectively.
Likewise, the company’s fixed line data revenues grew by 12 percent to P3.4 billion or P374 million higher versus the same period last year, mitigating the decline in traditional fixed voice services. Growth in fixed line data revenues was mainly driven by the continued success of various communication, collaboration and connectivity solutions offered to small and medium businesses, corporates and enterprises.
Consolidated EBITDA increased from last year’s level by over P1.1 billion to close the first nine months of the year at P28.3 billion against the prior year’s P27.2 billion. Revenue gains from mobile, broadband and fixed line data enabled the company to fully offset the increase in expenses.
Overall expenses, which include subsidy, operating expenses and depreciation charges, grew by 21 percent year-on-year from P50.4 billion to P60.8 billion, due to the continued reinvestments in new subscriber acquisitions and re-contracting, staff-related and network costs, and the additional depreciation expenses from the change-out of equipment related to the modernization programs. EBITDA margin now stands at 42 percent against 44 percent a year ago.
Excluding non-recurring charges such as accelerated depreciation related to the network and IT transformation projects which reached P8.3 billion from P3.0 billion last year, and foreign exchange and mark-to-market gains and losses, core net income grew by 9 percent from last year’s P8.8 billion to P9.5 billion as of end-September 2013. The company ended the first nine months of the year with net income of Php3.5 billion.
As of the third quarter of 2013, Globe Telecom’s network modernization remained on track. The change-out of all the network’s legacy access radios to state-of-the-art software defined radios (SDRs) is already complete, Cu said.
The company also completed the Submarine Fiber connection towards Coron Island last May 2013, complementing its existing Submarine Fiber Optic links towards Boracay and Palawan. More than 9,000 km. of fiber optic cable have already been added to Globe’s existing Fiber Optic Cable infrastructure as the Company continues to expand its Optical and all IP Transport network nationwide. Globe said it is continuing to optimize and upgrade the capacity of its modern network.
In relation to the IT transformation efforts, Phase 1 which involved the migration of postpaid mobile subscribers to the new Business Support System (BSS) is currently under stabilization management. The ongoing stabilization efforts have resulted in marked improvements in the system performance, Globe said.
Phase 2 which covers the migration of prepaid mobile subscribers is advancing gains in terms of development and testing from Phase 1, applying lessons improvements from Phase 1 towards delivering the desired Globe customer experience, Cu added.
