Globe sets 2024 capex at P55 billion, a 5-year low

MANILA, Philippines — Mobile giant Globe Telecom Inc. is bringing down its capital expenditures to a five-year low of P55 billion in 2024, as the telco works on attaining a certain cost efficiency for financial health.

Globe is reducing its capex spending by 22 percent to P55 billion this year from P70.6 billion in 2023, in line with efforts to return to a positive cash flow by 2025.

This marks the lowest budget that Globe will spend since 2019, when the telco invested P51 billion on new and expansion projects.

Since then, it has raised its capex to P60 billion in 2020, P93 billion in 2021 and P101 billion in 2022, upgrading its infrastructure network to support the digital migration of Filipinos. Now that its operations are scaled up, Globe wants to return to pre-pandemic levels of spending.

For 2024, Globe chief finance officer Rosemarie Maniego-Eala said the company would finance its capex by a mix of equity and debt.

Globe hopes to receive the balance of about P39 billion from its tower sale within the first half of the year.

As of 2023, Globe has raised 60 percent, or P57.4 billion, from the P96.4 billion that it expects to earn from the tower sale it signed with independent operators.

Globe president and CEO Ernest Cu also hopes that borrowing rates will be slashed soon, as this will help in stimulating not only business expansion, but also consumer demand.

Globe forecast revenue to grow by low to mid-single digit levels this year, banking on the variety of telco and tech products it has in its portfolio.

Based on its financial statement, Globe sustained a 29-percent drop in profit to P24.58 billion last year from P34.6 billion in 2022. The telco attributed the decline to the absence of one-time gains from the partial sale of its data center business in 2022.

Although revenue improved by three percent to P162.33 billion, this was offset by an increase in expenses of the same rate to P80.91 billion. Depreciation also went up by four percent to P47.36 billion, a trend expected to continue in the next few years as Globe invests on new assets.