Robust broadband business pushes up Globe's 9-month earnings

MANILA, Philippines — Globe Telecom Inc. reported higher earnings in the first nine months, driven by sustained demand for its broadband services that offset a modest growth in its mobile business.

Core net income, which strips out the impact of unusual financial events, stood at P18.3 billion in the past nine months, up 17% year-on-year, the Ayala-led telco told the stock exchange on Friday. In the third quarter alone, core bottom-line slumped 12% quarter-on-quarter to P5 billion. 

Explaining its financial performance, Globe said it continued to catch tailwinds from prolonged mobility restrictions that prompted workers to work from home and forced schools to implement online classes. The telco giant closed the first nine months with consolidated service revenues of P113.6 billion, up 4% compared with a year ago and surpassing the figure in 2019, or before the pandemic hit.

In the third quarter, service revenues hit P38.1 billion, the second highest quarterly figure in the company’s history. That financial strength is helping Globe navigate through the pandemic and withstand a “competitive industry environment,” Ernest Cu, company president and CEO, said.

“We are happy to report a resurgent business performance,” Cu said.

Broken down, Globe’s home broadband business raked in P22.4 billion revenues in the first nine months, up 15% year-on-year amid high demand from its subscriber base, which rose to 3.7 million during the period. Demand was so strong that data traffic from Globe’s home prepaid Wi-Fi jumped 79% year-on-year to 628 petabytes in the last three quarters.

Meanwhile, Globe’s mobile business, which accounted for 69% of total service revenues, posted a measly 1% on-year topline growth in the January-September period to P78.3 billion after renewed lockdowns back in August and September dampened mobile data consumption. With tighter restrictions keeping people at home again, nine-month revenues from mobile voice and SMS sagged 14% and 17% year-on-year, respectively.

Globe is ramping up the construction of more cell towers to meet surging demand and improve services. Since the beginning of the year, Globe has built 1,080 new cell sites in the archipelago, pushing up the company’s nine-month  capital expenditures to P65.4 billion which already surpassed last year’s full investments of P60.3 billion.

Shares in Globe fell 1.15% on Friday to cap the week at P3,430 each, bucking small gains in the main index.