Before provisioning, net income was P5.3 billion, 69 percent more than last year’s. Service revenues grew 24 percent to P23 billion which, along with an eight-percent decline in cash operating cost and expenses, boosted net income by 69 percent before the provisioning made on subsidiary Isla Communication’s C2C (submarine cable project) equity investment.
As a result of good top-line growth, earnings before interest, taxes, depreciation and amortization (EBITDA) grew 22 percent year-on-year to P13.7 billion with EBITDA margin stable at 59 percent in the first semester of 2003.
During the second quarter, Islacom, a 100-percent subsidiary of Globe, set up an additional provision of P179 million to fully provide for the loss on its equity investment in C2C Holdings, Pte., Ltd. (C2C), amounting to P895 million. Globe took an Globe Telecom initial P716 million provision against the investment in the first quarter of 2003. C2C is the holding company for the private consortium that owns the C2C cable system which continues to operate.
Globe’s total asset base stood at P145 billion as of June 30, 2003, up seven percent up from the same period last year. Capital expenditures amounted to be P8.8 billion, representing 38 percent of service revenues, down from 48 percent for full-year 2002. Free cash flow was strong at P4.8 billion, over five times higher than the P892 million recorded for the same period last year.
Globe lTelecom ads expanded its subscriber base which saw 942,460 net new customers added during the period.
"We are happy with the performance of the company, as well as the continuing favorable developments in the industry in the first semester of the year," Globe Telecom president and CEO Gerardo C. Ablaza, Jr. said.
He added that the sustained subscriber take-up leads them to believe that the rest of the year will likewise be as fruitful as the first semester. Total wireless subscribers reached almost 7.3 million, 34 percent higher than last year.
Globe Telecom led the postpaid market in the second quarter as it captured 91 percent of total net additions. The company set a new record with its postpaid gross and net additions of approximately 135,000 and 94,000, respectively, the highest ever posted by the firm in a quarter.
As a result, the company’s market share in the postpaid segment increased to 74 percent from 72 percent at the start of the quarter. Growth in the prepaid segment registered at 825,913 net additions in the first half of the year which according to officials resulted from healthy gross customer acquisitions which more than doubled to 2.2 million.
Globe Prepaid Plus’ total subscriber base was at 5.6 million after the delisting of 242,800 inactive prepaid subscribers. Company officials however, emphasized that the one-time adjustment in the subscriber numbers had no adverse financial impact and the system has since been modified.