THE GLOBE GROUP closed the first nine months of 2023 with all-time high consolidated service revenues amounting to ₱121.1 billion, up a robust 3% from a year ago, despite the extended macroeconomic headwinds faced by the industry.
This remarkable performance was mainly fueled by the strong contributions from its mobile, corporate data and non-telco services, which fully offset the anticipated decline in home broadband. Globe’s non-telco services, posting an impressive 44% yearly growth now accounts for 3.4% of its total consolidated service revenues from 2.4% last year. Additionally, total data revenues for the nine months period ending September 30, 2023 stood at ₱99.6 billion, representing 82% revenue contribution to Globe’s topline from 81% in the year earlier.
Mobile business revenues posted a record ₱83.2 billion as of end-September 2023, up 3% versus the ₱80.6 billion reported in the same period last year. The stronger revenue performance of the prepaid brands is a testament to the relevance of the Company’s data-centric value for money offers, which allows our customers to enjoy world-class network quality and service despite the continued inflationary pressures.
Total mobile revenues comprised 69% of the total consolidated service revenues, with the total mobile customer base (post SIM registration) ending at 54.7 million for the first nine months of the year.
From a product standpoint, mobile data revenues reported ₱67.0 billion for the nine-month period this year, a 7% hike from the ₱62.5 billion a year ago. Mobile data traffic soared to 4,360 petabytes as of end-September of 2023, from 3,365 petabytes reported in the same period of 2022, driven by the continued consumption of high-bandwidth online videos and social media content over smartphones. Mobile data now accounts for 81% of mobile revenues from 78% last year. Conversely, traditional mobile voice and SMS revenues ended at ₱10.2 billion and ₱6.0 billion, lower year-on-year by 11% and 10%, respectively.
Home Broadband business, on the other hand, generated a total of ₱19.0 billion revenues as of end-September 2023, still down by 7% from last year’s ₱20.5 billion. This was primarily caused by the decline in fixed wireless products as partly offset by the positive momentum of postpaid fiber. The Company is seeing an encouraging shift in trends as the decline in our fixed wireless revenues and operating metrics has slowed down, consistent with Company’s guidance of the business normalization bottoming-out. Furthermore, Wired revenues now account for close to 85% of the total Home Broadband Business, mainly coming from Fiber customers, which make any further declines in FWA less material. Postpaid Fiber subscribers and revenues grew year-on-year by 2% and 18%, respectively.
Total Home Broadband subscribers now stand at 1.7 million (post SIM registration) or down by 35% from the previous year with the expected normalization of the fixed wireless base as the market shifts to a more reliable wired connectivity. HPW data traffic likewise declined to only 232 petabytes this period from 355 petabytes the year earlier. Furthermore, FWA subscriber numbers reflect the impact of the sim card registration (SCR) exercise.
Additionally, with the official launch of GFiber Prepaid last July, Globe has received positive sentiments from customers on its fully digital experience (with 63% installed within 24 hours), affordability along with the convenience of loading via GCash and good network experience. Globe is pursuing a more measured approach to customer acquisition compared to industry, as the focus of the Company is on acquiring quality subscribers that will stay active on the network longer. To date, the Company is seeing the GFiber Prepaid base as having the highest reload rate and loader ARPU among the prepaid brands of Globe, which is reflective of the quality subscriber base being built.
As the Company continues to explore optimal solutions to support its enterprise clients and provide them with more ways to embrace digital transformation, Corporate Data business sustained its upward momentum this period. Corporate data revenues reached a record ₱13.6 billion this period, outpacing last year’s performance by 8%. This was mainly attributed to the excellent performance of information and communication technology (ICT) services, which grew 20% year-on-year.
Likewise, Globe’s transformation from telco to techco has led the Company to diversify its portfolio with greater emphasis on digital solutions. Globe ventured into various sectors such as fintech, virtual healthcare, e-commerce, business outsourcing, adtech, edutech, climatetech, media, and entertainment, among others. As of the first nine months of the year, the Company’s non-telco revenues continued to post very strong growth with 44% increase at ₱4.1 billion from ₱2.8 billion as of end-September last year. This stellar performance was brought about by the improved revenues across Globe subsidiaries led by ECPay, Adspark, Asticom and Yondu.
Meanwhile, Globe’s total operating expenses including subsidy as of the nine-months period of 2023 amounted to ₱60.4 billion, leaping from ₱57.6 billion reported in the similar period last year. The Group continued its efforts to control costs as evidenced by lower marketing & subsidy, lease and provisions. However, these savings were fully offset by increases in repairs & maintenance, services and others, as well as administrative expenses.
For the first nine months this year, the Globe Group’s consolidated EBITDA reached a record ₱60.7 billion or 1% above year-on-year, as the 3% topline expansion was partly cushioned by the 5% surge in operating expenses (including subsidy). EBITDA margin, which stood at 50% this period, remains within Globe’s guidance for the year.
Mynt, the Globe Group’s fintech arm, has continued its upward trajectory. Being the preferred mobile wallet in the Philippines, GCash continues to empower more Filipinos with digital financial tools and services, which led to its growth in users and profitability. The Globe Group’s share in Mynt’s equity earnings amounted to ₱1.6 billion, which now accounts to 6% of this period’s net income before tax. Compared to the same period last year, Mynt’s equity earnings grew by 149%.
Net income however, dropped by 27% against the same period last year mainly due to the increased depreciation expense as well as this period’s non-operating charges versus last year’s non-operating income which included the partial sale of Globe’s data center business. Excluding this one-time gain, normalized net income would have been ₱14.8 billion, or down by 11% compared to the previous year.
Accordingly, core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, closed at ₱14.8 billion for the period or down by 8% versus the same period last year.
Globe’s balance sheet remained healthy and gearing comfortably within bank covenants despite the increase in debt from ₱233.2 billion as of end-December 2022 to ₱245.5 billion this period. Globe’s gross debt to EBITDA is at 2.62x while net debt to EBITDA is 2.46x; and debt service coverage ratio is at 3.56x.
“Our third quarter results show that our telecom business performance is very much aligned to the guidance we have set. On the other hand, our pivot to a techco business is showing signs of momentum. We are happy that more of the non-telco businesses are contributing to the Group’s overall business growth and resilience. We will continue to look for opportunities to thrive amidst the macroeconomic challenges and competition. We believe that our renewed focus on innovation, collaboration, sustainability and service, backed by our unwavering commitment to network excellence are the imperatives that will keep us ahead and will pave the way for a digitally inclusive and prosperous Philippines,” Ernest L. Cu, President and CEO of Globe Telecom Inc., stated.
About Globe
Globe Telecom, Inc. is a leading digital platform in the Philippines, with major interests in telecommunications, financial technology, digital marketing solutions, venture capital funding for startups, entertainment, and virtual healthcare. The company serves the telecommunications and technology needs of consumers and businesses across an entire suite of products and services including mobile, fixed, broadband, data connectivity, internet and managed services. In 2019, Globe became a signatory to the United Nations Global Compact, committing to implement universal sustainability principles. Its principals are Ayala Corporation and Singtel, acknowledged industry leaders in the country and in the region.
It is listed on the Philippine Stock Exchange under the ticker symbol GLO and had a market capitalization of US$4.6 billion as of the end of September 2023.
For more information, visit www.globe.com.ph. Follow @enjoyglobe on Facebook, Twitter, Instagram and YouTube. ###
