Sets $850-M capex
Globe Telecom on Thursday said that its net profit in 2014 grew by 170 percent to a record P13.4 billion, driven by the solid performance of its mobile, broadband, and fixed-line data businesses.
“2014 is another banner year for Globe Telecom, reaching the best-ever consolidated service revenues, EBITDA, [earnings before interest, taxes, depreciation, and amortization]net income and core net income despite intensifying competition,” Globe president and chief executive officer Ernest Cu said.
The Ayala-led company said consolidated service revenues reached a new high of P99 billion, besting the previous high of P90.5 billion in 2013.
Core net income, which excludes the impact of accelerated depreciation and other non-recurring charges, grew 25 percent year-on-year to an all-time high of P14.5 billion from P11.6 billion in 2013.
Net income surged to P13.4 billion in 2014, 170 percent higher than the P5 billion net income reported in 2013.
Globe said the solid full-year results were buoyed by a strong second-half performance, with fourth-quarter revenues at an all-time quarterly high, peaking at P26.3 billion, which was 5 percent higher than the previous best of P25 billion in the preceding quarter and a 13-percent improvement from the P23.2 billion from the same period last year.
For 2015, the company expects the market to remain challenging and competitive, particularly given the shifting focus of customer lifestyles and usage into the digital world.
The company’s new capital expenditures for 2015 are programmed to be approximately $650 million, which remains consistent with the original capital expenditure (capex) program earlier guided.
The balance of the capex is seen to be spent for business support systems in line with product innovations, and other corporate capex. With the $200-million capex, which was initially estimated in 2014, expected to slide into the early parts of 2015, total cash capex for 2015 would be approximately $850 million.
“Even as we face new challenges in the coming year, we are optimistic that the new innovations and product offerings we have lined-up will continue to be relevant to our customers, provide growth across all our businesses and create value for our shareholders,” Cu said.
Demand for data
Globe said the robust performance was driven by sustained demand for data connectivity across the mobile, broadband and fixed-line data businesses, which improved by 7 percent, 22 percent and 17 percent, respectively, given the increasing affordability of the service and compelling gadget bundle offers, backed by Globe’s improved network with 100 percent 3G and 4G coverage completed during the year.
“Reaping the benefits of our modernized network, with 100 percent 3G and 4G coverage, we have seen a steady and healthy growth in both our mobile and broadband businesses, surpassing all of our expectations, and we are confident in sustaining this momentum moving forward,” Cu said.
Mobile telephony revenues, which contributed 79 percent to consolidated revenues, grew 7 percent to P78.1 billion in 2014 from the prior year’s P72.8 billion, propelled by growth in the Globe Postpaid and mass-market TM brands.
Driven by the rapid expansion of the postpaid base, which stood at 2.3 million at the end of the year, Globe Postpaid revenues improved 11 percent to P29.9 billion from P27.1 billion in the previous year.
For the prepaid segment, TM had another banner year with a 14-percent growth in revenues and a 21-percent increase in customer base compared to 2013. Globe said TM now accounts for 51 percent of the total mobile subscriber base.
The company said that despite the continued pressures on yields with the increasing multi-SIM incidence in the market, as well as the popularity of value-based bucket and unlimited offers for voice and SMS services, total prepaid revenues improved by 5 percent to P48.2 billion from P45.7 billion in 2013, signaling its return on a growth track.
Total mobile subscriber base stood at 44 million as of end-December 2014, up by a solid 14 percent from the 38.5 million a year earlier.
The rapid growth momentum for Globe’s broadband businesses continued in 2014, registering steady double-digit growth of 22 percent for revenues and 37 percent for customer base year-on-year.
Globe ended the year with nearly 2.8 million broadband subscribers, with strong growth seen across fixed broadband, wireless broadband and long-term evolution (LTE) solutions of 16 percent, 42 percent and 377 percent, respectively.
The introduction of more affordable products and competitive tablet bundles throughout the year and the expanded pervasiveness of the fixed and wireless broadband network stimulated the robust performance in the year just ended, the company said.
The company’s fixed-line data segment likewise posted 17 percent growth in revenues to P5.5 billion, or P790 million higher compared to the P4.7 billion revenues posted in 2013, as the corporate demand for various communications and connectivity solutions continue to grow.
Also, it said the fixed-line voice segment improved by 7 percent to P2.8 billion from P2.6 billion the previous year, given the continued popularity of bundled internet and landline plans at competitive price points.
Total consolidated EBITDA reached a record P39.3 billion in 2014, up by P2.8 billion or 8 percent against the P36.5 billion registered in 2013, as the revenue gains fully offset the increase in operating expenses.
Operating expenses, which include subsidy and other operating expenses, grew by 11 percent from P54.0 billion in 2013 to P59.8 billion in 2014.