Globe’s1 consolidated gross service revenues grew by 3% to P41.1 billion in the first three months of 2024, despite the decline in home broadband and non-telco services. This strong performance was fueled by the robust growth of its mobile and corporate data businesses, which accounted for 83% of the topline. Mobile revenues grew 8%, and corporate data revenues climbed 10%. Globe’s data revenues in the first quarter of 2024 saw a notable increase, reaching 85% of total consolidated gross service revenues, up from 82% the previous year. On a comparable basis, where the prior period is adjusted to assume the
deconsolidation of ECPay from Globe’s books in Q1 2023 (with the sale of its 77% stake in ECPay2 to Mynt), Globe’s total consolidated gross service revenues would have grown higher by 5%.
Amidst the challenging economic conditions impacting consumer spending, Globe’s mobile business exhibited unwavering growth, recording P29.1 billion in revenues as of end-March 2024, or up 8% from last year’s P27.1 billion. The driving force behind this success is Globe’s effective market repair efforts, as customers continue to choose Globe for its differentiated network quality and service. Total mobile revenues now account for 71% of the total consolidated gross service revenues, up from 68% a year ago. This is a testament to the Company’s robust business model and strong customer base, which reached
58.8 million mobile customers for the first three months of the year.
From a product perspective, mobile data revenues grew by 10% to P23.8 billion for the three-month period this year, from P21.7 billion a year ago. This was mainly fueled by the Filipinos’ increasing reliance on mobile devices for various activities such as online shopping, streaming media, and engaging in social media. The widespread use of smartphones and the growing popularity of data-intensive applications have further contributed to this revenue growth. In the same period, mobile data traffic soared to 1,610 petabytes, up from 1,352 petabytes reported in the same period of 2023. Mobile data now accounts for 82% of mobile revenues from 80% last year. Conversely, traditional mobile voice and SMS revenues ended at P3.4 billion and P1.9 billion, lower year-on-year by 2% and 3%, respectively.
During the first quarter of 2024, the corporate data business experienced continued growth, driven by the company’s dedication to delivering innovative solutions that assist in digital transformation and cater to the needs of its enterprise clients. The corporate data revenues increased by 10% year-on-year to approximately P5.0 billion, primarily driven by the growth of core data services by 12% and information and communication technology (ICT) services by 7%.
Home Broadband’s revenues, on the other hand, declined by 6% to P6.1 billion in the first quarter from P6.5 billion a year ago, due to the drop in fixed wireless but was partly cushioned by the positive growth of postpaid fiber. The postpaid fiber segment, accounting for 84% of Home Broadband, exhibited positive growth, with a 3% increase in subscribers and revenues year-on-year. However, home broadband revenues were flat compared to the fourth quarter.
The decline in Globe’s fixed wireless revenues is decelerating, consistent with the company’s guidance. The initial surge in demand for reliable data connectivity during the COVID-19 pandemic led to a significant increase in sales for the company’s Home Prepaid WiFi product. However, as market preferences shifted towards more stable wired connectivity post-pandemic, fixed wireless metrics began to normalize and declined gradually, aligning with earlier expectations. Globe anticipates that this positive trend, combined with the new GFiber Prepaid, will enable positive growth in total broadband revenues during the second half of this year.
Additionally, customers have been highly receptive to GFiber Prepaid since its launch in the latter half of 2023. The positive feedback highlights the service’s strengths, including its fully digital experience, affordability, reliable network connectivity, and convenient loading via GCash. This demonstrates Globe’s understanding of the prepaid consumer market’s needs and has resulted in a 53% growth in acquisitions in the first quarter. Notably, April witnessed a threefold increase in GFiber Prepaid acquisitions, indicating the service’s promising growth trajectory, which is anticipated to continue during the latter half of the year.
The total subscriber base of Home Broadband dipped by 26% to 1.7 million from 2.3 million in the year earlier, mainly due to the normalization of the fixed wireless broadband as the market transitions towards
more reliable wired connectivity. Likewise, HPW data traffic declined from 86 petabytes in the previous year to only 54 petabytes in the current reporting period.
The Company’s non-telco revenues declined by 60% year-on-year compared to the P1.4 billion reported at the end of March the previous year. This sharp drop resulted from the deconsolidation of ECPay from Globe’s books, following the sale of its 77% stake in ECPay to Mynt in September 2023. However, if ECPay’s deconsolidation had been reflected in Globe’s books during the first quarter of 2023, total non-telco revenues would have been lower by only 31%.
Meanwhile, Globe’s total operating expenses including subsidy jumped to P19.8 billion in the three-months period of 2024 from P19.5 billion a year earlier. The Company’s cost-saving efforts, which included lower marketing & subsidy as well as provisions, were offset by increases from leases, repairs and maintenance, staff costs and administrative expenses.
For the first three months this year, Globe’s consolidated EBITDA reached P21.4 billion, or up a solid 4% from a year ago. This was primarily driven by a 3% increase in the topline, partly offset by a 2% surge in operating expenses (including subsidy). Likewise, the Company’s EBITDA margin has increased year-on-year, rising from 51% to 52%, outperforming the full-year guidance of 50%. This expansion is a testament to the company’s dedication to maximizing operational efficiency and ensuring continuous development.
Mynt, Globe’s fintech arm, maintained its upward momentum, further solidifying its position as the largest cashless ecosystem in the Philippines. GCash remains the preferred choice, empowering an increasing number of Filipinos with a diverse range of digital financial tools and services, resulting in significant growth in both user base and profitability. Globe’s share in Mynt’s equity earnings for the first quarter of the year amounted to P962 million, which now accounts for 11% of this period’s net income before tax versus 4% from the year earlier. Compared to the same period last year, Mynt’s equity earnings grew by 138%.
Net income declined by 7% to P6.8 billion compared to the P7.3 billion reported in the previous year. This was mainly attributed to higher depreciation expenses and non-operating charges, as opposed to non-operating income in the same period last year. Excluding the one-time gain from the tower sale, normalized net income would have been at P5.8 billion, reflecting a 13% increase compared to the previous year.
Accordingly, excluding the effects of non-recurring charges, foreign exchange, and mark-to-market charges, Globe’s core net income soared to P5.8 billion this period, a significant 13% uptick compared to the same period last year.
Globe’s balance sheet remained healthy with gearing comfortably meeting bank covenants with total debt improving from P250.0 billion as of end-December 2023 to P246.7 billion this period, Globe’s gross debt to EBITDA is at 2.70x while net debt to EBITDA is 2.52x; and debt service coverage ratio is at 1.89x.
“Our financial performance for the first quarter exceeded expectations, with an impressive 52% EBITDA margin, indicating a positive start of the year and building momentum going into the coming quarters.” said Ernest L. Cu, President and CEO of Globe Telecom Inc.
“We are also pleased with the progress of our landmark tower deal with the successful transfer of a significant portion of the towers, reaching nearly 70%. We have put in place plans to ensure that the majority of the proceeds will come in by the first half of the year. This move puts us in a solid position to meet the dynamic connectivity demands of our customers and stay at the forefront of the industry.”
“Guided by a clear strategic focus on innovation and customer-centricity, we are confident in our ability to overcome challenges and seize the opportunities to create a brighter and more connected future for the Philippines.” Mr. Cu added.
