Globe Telecom 2013 core net profit up 13%; revenues reach new record

Sunday, February 16, 2014
Globe Telecom sustained growth momentum in 2013 as core net profit rose 13% to P11.6 billion as strong performance of its mobile, broadband, and fixed line data businesses continued to drive revenue growth notwithstanding the onslaught of natural calamities in the last quarter of the year.

The company’s consolidated service revenues for 2013 reached a fresh record high of P90.5 billion, up 9% from P82.7 billion last year, driven by the continued growth in the demand for data connectivity across the mobile, broadband and fixed line data businesses, which improved by 8%, 20% and 13%, respectively. The robust top-line results prove Globe’s sustained execution excellence of products and promotions that remain relevant to its subscribers, backed by its improved network performance, as Globe moves forward in its network and IT transformation programs. 

“We are happy and encouraged by what we have achieved in 2013, surpassing all our expectations. We have said in the past that 2013 is a transition year and the most critical period for Globe, given the network and IT modernization projects we undertook through the year while competing in a fast evolving market. Our sustained growth momentum is an evidence of the underlying strengths of our superior products and services and the differentiated customer experience we provide, said Globe President &CEO Ernest Cu. “Notwithstanding the impact of the recent devastation in the Visayas region due to typhoon “Haiyan”, which tempered the seasonal uplift in the fourth quarter, we still managed to end the year at a high note reaching all-time high gross consolidated revenues. While the resilience of our performance is welcome, we will not be complacent and will strive harder in 2014. Globe has always been and will continue to be firmly committed in creating more value for our customers and shareholders.” Mr. Cu added.

Mobile revenues, which contributed over 80% of total revenues, grew 8% year-on-year to P72.8 billion compared to the prior year’s P67.2 billion, owing to the sustained leadership of the Globe Postpaid brand. Globe continued to invest in acquiring and retaining high-quality postpaid customers, resulting in the growth of the subscriber base to over two million, up 17% from last year. The continued expansion of the postpaid subscriber base has resulted in the sustained growth of postpaid revenues to P27.1 billion, an 18% improvement year-on-year. On the prepaid segments, revenues grew 3% year-on-year despite the continued pressures on yields brought about by the shift from pay-per-use to value-based bucket and unlimited offers and the pervasiveness of multi-SIM incidence in the market. Total mobile subscriber base reached 38.5 million as of end-December, up 16% from the 33.1 million a year ago. 

Globe’s broadband businesses flourished in 2013, registering sharp growths on both revenues and customer, expanding respectively by 20% and 22%, year-on-year. Globe ended the year with over 2 million broadband subscribers, with the fixed DSL and nomadic broadband segments registering growths of 24% and 11%, respectively. The competitiveness and affordability of the various offers launched throughout the year and the expanded pervasiveness of our fixed and wireless broadband network contributed to the robust performance in the year just ended. 

The company’s fixed line data segment registered revenues of P4.7 billion, P524 million or 13% higher compared to revenues in 2012, mitigating the decline in traditional fixed line voice services. Growth in fixed line data revenues was attributed to the continuous demand for various communications and connectivity solutions to address the requirements of our enterprise clients. 

Globe recorded consolidated EBITDA of P36.5 billion in 2013, up P1.5 billion or 4% against the P35.0 billion registered in 2012, as the revenue gains fully covered the increase in operating expenses. Operating expenses, which include subsidy and other operating expenses, grew by 13% from P47.7 billion to P54.0 billion, largely on increases in subsidy and re-contracting costs, trade and other provisions, and staff-and network-related expenses. EBITDA margin for 2013 stood at 40%, against 42% as of end 2012. Driven by the growth in EBITDA, Globe’s core net income, which excludes the impact of non-recurring accelerated depreciation charges related to assets affected by the company’s network and IT transformation programs, grew to P11.6 billion from P10.3 billion in 2012. 

On a sequential basis and consistent with seasonal trends, Globe’s quarterly gross revenues improved 2% in the fourth quarter of 2013, reaching P23.2 billion from P22.7 billion in the third period of the year. The recent Haiyan calamity in the central Philippines softened the revenue growth in the seasonally strong fourth quarter, directly through its impact on the subscribers in the affected areas and indirectly as consumers cut back on spending in favor of donating to relief and rehabilitation efforts. 

Consolidated EBITDA registered at P8.2 billion, translating to EBITDA margins of 35% while core net income for the quarter registered at P2.1 billion. 

Globe continued to lead in the Postpaid segment with the AppleTM launches during the last quarter of 2013 starting with the iPhone 5c and iPhone 5s and the eventual release of the new iPad Air and iPad mini with Retina display. This year’s iPhone launch (iPhone 5c and iPhone 5s) however, was scaled down and used to promote aid and relief efforts in light of the recent calamity “Haiyan” that affected millions of Filipinos in the Visayas region. Subscribers who attended the event were encouraged to bring in-kind donations as well as donate via Globe’s GCash facility. The iPhone 5c and iPhone 5s were made available under the Company’s suite of first-ever fully customizable postpaid plans (Best-Ever mySUPERPLAN) and the exclusive gadget upgrade program (iPhone Forever program). 

Under the iPhone Forever program, new and existing Globe subscribers who are loyal iPhone users can swap their current devices to get a new iPhone every year for free or with minimal one-time cash out. The iPhone 5c 16GB can be availed starting at iPhone Forever Plan 1599, while the iPhone 5s 16GB is available at iPhone Forever Plan 1999, both for a contract of 24 months and are bundled with 1 gigabyte (GB) of mobile LTE surfing and free calls and texts. Higher value postpaid plans are also available: iPhone Forever Plan 2999, iPhone Forever Plan 5599 and iPhone Forever Plan 6999. The iPad Air and iPad mini with Retina display, on the other hand, can now be availed with the following postpaid plans for 24 months contract period and complete with 85 hours of LTE surfing: iPad Air 16GB is available for as low as P1,624 monthly at Plan 499 with P1,125 monthly cashout while the 32GB variant is available for as low as P1,790 monthly at Plan 499 with P1,291 monthly cashout. Meanwhile, the iPad mini with Retina display 16GB is offered at P1,499 monthly at Plan 499 with P1,000 monthly cashout while the 32GB variant is available at P1,665 monthly at Plan 499 with P1,165 monthly cashout. 

Setting another milestone in Philippine telecommunications, the company gave its over 38 million subscribers (Postpaid/Prepaid/TM) free mobile phone access to Facebook for a period of three months until January 2014 and which was subsequently extended until February 14, 2014. Globe worked closely with Facebook to enable customer experience innovations for the best free Facebook offer without the need for Wi-Fi. This campaign is in line with Globe’s strategy to bring more people online and overcome the fear of using mobile internet, and increase the habit of mobile browsing and surfing over Globe’s improved 3G, HSPA+ and LTE networks.

Moreover, Globe Prepaid conducted a 3-day mall gadget sale dubbed “Prepaid on the Go, Great Gadget Sale” wherein subscribers can get awesome discounts on various brands such as Samsung, Nokia, LG, Sony, Alcatel, Lenov, O+, Cherry Mobile, MyPhone, and Star Mobile. Subscribers may also trade-in their old phones or use their rewards points to enjoy up to 90% off for their purchase of phones and gadgets. Also, in order to drive subscription to Globe Prepaid’s GoUnli30 (one-day unli calls/texts, unli chat with the best chat apps) during the Christmas season, subscription to the promo qualifies its subscribers a chance to win a barkada trip for 4 to Singapore. Globe likewise launched the “Choose Your Number SIM” with FREE unlimited calls to Globe/TM and unlimited text to all networks plus Facebook. 

TM, on the other hand, launched during the quarter TipIDD30 which offer four minutes of international calls to Saudi, UAE, Kuwait, Bahrain, Italy, UK, Australia and Japan for only P30 a day and AstigItxt20which gives its subscribers 30 international and all-network texts for only P20 valid for 1 day. 

For the Broadband business, Globe continued to step up its best value offers with the new Tattoo Prepaid tablet bundles wherein its subscribers can save as much as P2,845 with these new offers which carry affordable tablet selection starting at P4,995 for a CloudPad 705Wor a SkyWorth S73 and P6,995 for a SkyWorth S82. All these new bundles come with FREE Tattoo Mobile Wi-Fi that connects up to 10 devices with speeds of up to 7.2 Mbps. Tattoo LTE Mobile Wi-Fi with LTE speed of up to 42 Mpbs was also made available for only P4,995 with FREE 5GB of data for 7days. Tattoo Postpaid on the other hand, now offers a FREE Mobile Wi-Fi with speed up to 12 Mbps with Tattoo unlimited Plan 999. 

Globe once again expanded its international footprint with the launch of Globe local Italy SIM last November 24, 2013. Filipino communities in Italy can now enjoy calls to Globe in the Philippines for just five Euro cents per minute, the lowest among all Italian mobile operators. This was made possible with the partnership with Compagnia Italia Mobile S.r.l., one of the leading MVNOs in Italy, and Effortel Technologies, a Belgium-based network enabler company. Italy is now the sixth country where Globe has robust presence, joining the ranks of the USA, the United Kingdom, Singapore, Hong Kong and the Kingdom of Saudi Arabia. 

GCash, Globe’s mobile payment and remittance service, is set to expand its network service in the country by growing its user base with the recent partnership with TORCHe Global Marketing, Inc. (TGMI), a marketing consultancy firm focused on helping companies reach out to the widest possible consumer base through the latest technologies in mobile commerce and advertising. GCash services that will be made available for use of TGMI affiliates include PowerPay+ Card, Buy Load service and Gcash outlets. Also, during the last quarter of 2013, several initiatives on GCash were launched in order to expand its portfolio of services including real property tax payments via GCash available in Quezon City and Valenzuela; buy through blink coupon codes for subscribers to experience unlimited Movie and TV show streaming; or convert Gcash to rewards points. In addition, subscribers can now also apply for BanKO loan via GCash with low interest rate, fast approval and hassle-free loan payments. Loan credit and collection will be through their GCashPowerPay+ wallet. BPI-Globe Banko, the first mobile-based, microfinance-focused savings bank in the Philippines, have joined hands with US Agency for International Development, in helping rural communities gain access to formal financial services using their mobile phones. This partnership was announced during the launch of the mobile money financial service for the llijan Multi-Purpose Cooperative.

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