Globe Telecom Q3 net income after tax tumbles 50%

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Ayala-led Globe Telecom Inc. on Monday said its net income after tax dropped 50 percent in the third quarter of the year from the same period last year due to depreciation and non-operating charges, including costs incurred in the acquisition of a telecom asset of San Miguel Corp.

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Net income after tax fell to P2.7 billion in the July to September period, the company said.

In the first nine months of the year its net income reached P11.7 billion from P14.1 billion, as the gains in EBITDA (earnings before interest, taxes, depreciation and amortization) were offset by the increases in depreciation and non-operating charges, including costs related to its acquisition of SMC’s telecommunications assets, the company said.

Globe noted it was able to sustain the top line growth momentum in January to September, with consolidated service revenues of P89.1 billion, up 7 percent from P83.4 billion a year earlier.

Ernest Cu, Globe president and chief executive officer, said the efforts in providing market-relevant data offers, the best of breed solutions to cater to the evolving needs of its customers, backed by the significant improvements in wireless and wired data networks paved the way for its continued success.

“Notwithstanding the serious turn in the level of competition, we are happy that the company’s overall financial results remained strong and still on-track with our guidance for the year,” Cu said.

“We remain steadfast with the expansion of our data network and capacities, to maximize the use of the additional 700 and 2600 megahertz (MHz) frequencies by investing heavily in LTE to give our customer the best experience in terms of the speed and reliability of our internet services.” he added.

Mobile revenues slightly grew by 1 percent year-on-year, reaching P68.3 billion in the first nine months from P67.5 billion a year earlier, reflecting the continued shift towards digital lifestyles in voice and SMS core services.
As of end-September, the company’s mobile subscriber base reached 65.4 million, up 23 percent from 53.1 million reported in the same period last year, driven by the strong prepaid gross acquisitions during the period.

From a product perspective, mobile data remains the top contributor to mobile revenue, which totaled P25.2 billion – up 31 percent from P19.2 billion.

The growth in mobile data services was underpinned by the growth in data traffic from 176 petabytes (PB) to 249 PB, as smartphone penetration increased to 54 percent and Globe Telecom’s data-driven product portfolio expanded.

On a sequential basis, mobile data declined by 7 percent at P8.0 billion from P8.6 billion in the third, given the market aggression during the quarter, which affected mobile data yields.

Mobile data services now comprised 38 percent of total mobile revenues, up from 29 percent in the first nine months of 2015. Revenue from home broadband service grew at P10.7 billion from P7.8 billion, with the subscriber base rising to 1.15 million customers.

The growth in revenue was driven by the continued increase in fixed wireless customers (up 35 percent year-on-year), due to the growing demand for internet and data connectivity and the popularity of Globe Telecom’s premium entertainment content from HOOQ, the NBA, Disney, and Netflix.

In line with the company’s vision for the Philippines to become an admired nation for having first world internet connectivity, the company has started deploying fiber broadband technology to provide ultra-fast internet access to two million homes in 20,000 barangays by 2020.

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