Excluding foreign exchange and mark-to-market gains and losses, net income grew at an even stronger rate of 54 percent year-on-year.
As a result of its strong six-month performance, the company raised its cash dividend per share to P30 from P20. The board of directors amended the dividend policy and increased the pay-out from 50 percent to 75 percent of prior year’s net income. It also declared the second semi-annual cash dividend in 2006 of P30 per share to common stockholders on record as of Aug. 17, 2006. A total of P3.96 billion in dividends will be paid on Sept. 12, 2006. As this is being implemented only in the second half dividend, the payout in 2006 will be 64 percent.
"Our strong finish to the first half of the year is a reflection of increasing competitiveness resulting from the effective execution of key growth initiatives started in the second half of 2005. Recognizing the challenging times ahead, we will continue to focus on the fundamentals for strong sustainable growth, and to pursue continued cost and efficiency improvements for Globe," company president and chief executive officer Gerardo Ablaza said.
Globe officials noted that sustained improvements in revenues combined with effective cost management efforts fueled the growth in income this year.
Globe’s consolidated net service revenue continued on an upward trend, increasing by six percent year-on-year and one percent quarter-on-quarter to reach P28.5 billion for the first half of 2006. Half-year EBITDA (earnings before interests, taxes, depreciation and amortization) increased 23 percent to P18.9 billion, with effective cost management efforts translating to an 11 percent decline in operating expenses year-on-year.
However, EBITDA slightly dipped by five percent quarter-on-quarter due to a 12 percent increase in operating expenses owing to the additional marketing spending the company undertook in the second quarter. Nevertheless, Globe’s EBITDA margin reached a high of 67 percent for the first half of the year compared to 58 percent last year.
Officials noted that contributing to Globe’s revenue growth are the various value-based promos under its Super Sulit tariff initiatives, including the industry-leading per-second charging promo for both local and international calls. They emphasized that Globe Kababayan continues to play a major role in the company’s revenue growth as OFWs and their families increasingly take up the various value offers under this program.
They added that the company has also further lowered the cost of ownership of its products to make them more accessible to all Filipinos. Its TM Power SIM pack has been priced at a more affordable P59 - the lowest in the market. Its wholly-owned subsidiary, Innove Communications, also introduced its Globelines Postpaid Plus landline service for only P795/month inclusive of perks such as unlimited dial-up Internet and unlimited toll-free local calls to other Globelines users.
Net new SIMs in the first half totaled 1.5 million, 35 percent better than last year even though SIM swaps were then still in place. Globe’s SIM base grew by five percent this quarter with healthy net additions of about 700,000, bringing its cumulative wireless subscriber base to 13.9 million. TM continues to assert its presence in the broad mass market growing its base 56 percent year-on-year to close the first half of the year with four million subscribers.
On the wireline front, net service revenues registered a three percent increase both year-on-year and quarter-on-quarter reaching P3.2 billion at the first half of the year, bolstered by the steady growth in the company’s consumer broadband and corporate data businesses.
Globe said it continues to diligently expand its capacity to ensure superior quality as its geographic reach expands with over 5,500 cell sites as of end-June 2006. At the same time, its third generation technology (3G) network build-up is on track with the target of 1,000 installations by yearend.