Globe net income down 5% to P11.5B in H1

Globe Telecom Inc. saw its bottom line decline in the first half of 2020 as strict lockdown measures to contain COVID-19 spread weighed on its businesses.

In a disclosure to the Philippine Stock Exchange, the Ayala-led telco said its consolidated net income stood in the first six months of the year at P11.5 billion, down 5% from P12 billion in the same period in 2019.

This as total operating revenues declined by 3% to P78.8 billion from P81.5 billion a year earlier.

The decline in operating revenues was largely attributed to the impact of enhanced community quarantine (ECQ) and modified ECQ to Globe’s business operations, which resulted in a 1% decline in consolidated service revenues of P72.4 billion from P72.9 billion last year.

Meanwhile, Globe’s total data revenues, which now account for 75% of total service revenues was top revenue contributor, given the surge in consumption as Filipinos stayed in their homes and shifted into online activities such as work/learn from home, video and teleconferencing, online shopping, online/mobile banking, video entertainment, among others.

Core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, posted P11.1 billion, down 8% year-on-year.

“Globe’s network has withstood and continues to prove its resilience during this COVID-19 pandemic. Our priority to keep our network up to speed has allowed us to continuously serve our customers and ensure that communities stay connected during these tough times,” Globe president and CEO Ernest Cu said.

“While we expect revenues for full year 2020 to decline by low single digit against last year, given the impact of community quarantine restrictions, we do see growth opportunities on the home broadband front and ICT space. Higher demand for internet connectivity and cloud solutions are expected as companies have been forced to embrace remote working for employees and to fast-track their digitalization efforts. Mobile data and digital solutions will also increase traction with more customers adopting a digital lifestyle in the new normal,” Cu said.

Mobile business revenues for the first half of the year stood at P51.8 billion, 5% lower than the same period last year.

This was mainly driven by the decline in prepaid top ups and postpaid acquisition particularly during the ECQ period, according to Globe.

Total mobile revenues comprised 72% of the total service revenues, with a total mobile subscriber base of 80.2 million.

Mobile data revenues generated P35.8 billion, higher than P34 billion of last year, as customers now spend more time online.

Mobile data currently accounts for 69% of mobile revenues from 63% a year ago.

Mobile data traffic jumped from 764 petabytes in the first half of 2019 to 1,106 petabytes this period, or a 45% growth year-on-year.

Mobile voice and mobile SMS revenues for the period, ended at P10.2 billion and P5.8 billion, lower year-on-year by 16% and 30%, respectively, as more customers shift to data-based services versus the traditional voice calls and text.

Offsetting the decline in mobile business, home broadband sustained its growth momentum, generating a 19% revenue growth to reach P12.5 billion this period from P10.6 billion reported a year earlier.

Globe’s total home broadband subscriber base now stands at over 2.9 million, up 58% from the first half of 2019, driven mainly by the sustained increase of fixed wireless broadband users.

This growth was also achieved due to higher take up of Home Prepaid Wi-Fi as demand for wireless connectivity increased as Filipinos were forced to stay and work/learn from home due to restrictions brought about by the community quarantine, the telco said.

Corporate data revenues on the other hand, contracted by 3% year-on-year with total revenues of P6.2 billion as of end-June 2020, largely coming from lower domestic and international services.

This was partly cushioned by higher information and communication technology (ICT) revenues, as enterprises advanced their digitalization efforts.

By TED CORDERO, GMA News

Source: Peso Economics