Globe Telecom’s net income swelled 350 percent to P2.9 billion in the first quarter from P656 million in the comparative year-earlier period, thanks to a significant drop in depreciation charges on assets related to its modernization program.
Globe said core net profit, which excludes the impact of the non-recurring accelerated depreciation charges, increased nine percent to P3.4 billion from P3.1 billion a year earlier, driven by the strong performance of its business segments.
The company explained that depreciation charges decreased because the bulk of the accelerated depreciation charges — which were related to assets to be replaced in Globe’s network and IT modernization programs — were already incurred in 2013.
As a result, Ebitda or earnings before interest, taxes, depreciation and amortization, also improved.
“We are pleased with our performance in the first quarter as top-line growth momentum was sustained.”
Globe president and chief executive officer Ernest Cu said in a statement.
“We have also seen encouraging improvements in mobile browsing in terms of activity and number of users as a result of the successful Free Facebook promotion, and we hope to see continuous growth in mobile internet adoption among our customers moving forward,” he added.
The company said consolidated service revenues reached P23.2 billion in the first three months of the year, representing a nine-percent increase from the P21.4 billion in the same period of last year.
Globe’s revenue gains were driven by strong contributions across all business segments given the growth in both mobile and broadband customer bases, the sustained demand for data connectivity and the introduction of market-relevant promotions during the quarter.
Meanwhile, Globe’s mobile revenues improved by 8 percent to P18.5 billion in the first quarter from P17.1 billion a year earlier as the sustained growth in its postpaid segment was complemented by the solid performance from its prepaid brands.
The company’s postpaid segment continued its strong contribution to the company’s overall mobile business, with revenues reaching P7 billion, up 18 percent from P6 billion in the first quarter of last year.
On the prepaid front, Globe’s prepaid brands delivered an increase of two percent growth year-on-year despite the continued pervasiveness of multi-SIMming – or the practice of one customer having multiple SIM cards to take advantage of promotional pricing by different networks—and pressure on yields brought about by the popularity of bucket and unlimited offers.
Moreover, the company’s broadband business likewise sustained its double-digit growth on both revenue and customer base, which registered increases of 12 percent and 26 percent, respectively.
With now close to 2.2 million broadband subscribers, Globe’s broadband revenue reached P2.8 billion in the first quarter of 2014, up from P2.5 billion in the same period last year.
The company recorded consolidated Ebitda of P8.8 billion in the first three months of the year, increasing by P20 million from a year earlier.
Subsidy and operating expenses grew 15 percent year-on-year to P14.4 billion from P12.6 billion as Globe reinvested the gains from its revenues in acquiring and retaining high-quality subscribers and in the expansion of its data network.
“Given these results, we remain confident in sustaining the growth throughout the year as Globe moves closer to the completion of our network and IT transformation programs,” Cu said.