Globe’s nine-month profit slumps 27% on rising depreciation expenses

Ayala-led Globe Telecom Inc. reported a 27% decline in net income for the first nine months of the year to P19.36 billion, citing increased depreciation expenses and higher non-operating charges as key contributing factors.

Globe attributed the decline in net profit to “increased depreciation expenses and non-operating charges in this period, compared to last year when non-operating income included the partial sale of Globe’s data center business.”

Excluding this one-time gain, normalized net income would have been P14.8 billion, 11% lower than the previous year.

In the third quarter alone, Globe’s net income also dropped by 12%, amounting to P4.98 billion.

The core net income, which excludes the impact of non-recurring charges, foreign exchange, and mark-to-market charges, amounted to P14.8 billion from January to September, marking an 8% decrease from the P16.01 billion reported for the same period last year.

Ernest Cu, president and CEO of Globe, noted that the telecom business performance in the third quarter is aligned with the set guidance. He also highlighted the momentum in the company’s transition to a tech-oriented business, with non-telecom sectors contributing significantly to the group’s growth and resilience.

Cu expressed the company’s commitment to innovation, collaboration, sustainability, and service as they navigate macroeconomic challenges and competition. He believes that these elements, backed by a commitment to network excellence, will lead to a digitally inclusive and prosperous Philippines.

Despite the extended macroeconomic challenges faced by the industry, the Globe Group closed the first nine months with record high consolidated service revenues of P121.1 billion, up 3% on higher contributions from mobile, corporate data, and non-telecom services, effectively offseting the anticipated decline in home broadband revenues.

Globe also saw remarkable growth in non-telecom revenue, which expanded by 44% to P4.1 billion due to improved revenues from its subsidiaries, led by ECPay, Adspark, Asticom, and Yondu.

The mobile business delivered robust results with revenues rising 3% to hit a new high of P83.2 billion.

In contrast, the Home Broadband business generated total revenues of P19 billion, marking a 7% decline from last year’s P20.5 billion. Total Home Broadband subscribers now stand at 1.7 million, 35% lower than the previous year as the market shifts toward more reliable wired connectivity.

During the nine-month period, Globe built 833 new cell sites and upgraded 5,395 mobile sites to LTE to ensure seamless connectivity, high-speed data transmission, and consistent service availability across the country.

The company also deployed around 175,000 fiber-to-the-home (FTTH) lines, a decrease from the previous year, as Globe aimed to maximize the utilization of its existing fiber inventory in light of this year’s reduction in capex.

With Globe’s relentless pursuit of expanding its 5G technology nationwide, the company has deployed 716 new 5G sites across the Philippines. This has expanded its 5G outdoor coverage to 97.67% in the National Capital Region and 92.06% in key cities in Visayas and Mindanao.

Furthermore, Globe reported 5.2 million 5G devices connected to its network for the month of September 2023.

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