Ayala-owned Globe Telecom continued to deliver robust topline growth, sustaining record performance and profitability levels from the first half of this year.
Net income stood at P9.7 billion for the January to September 2007 period, up four percent year-on-year despite one-time charges related to the early repayment of Globe’s $300 million notes. Stripping out the impact of foreign exchange and mark-to-market gains and losses and the non-recurring bond redemption costs, core net income climbed to an all-time high of P10.5 billion, growing 20 percent year-on-year.
Consolidated service revenues for the first nine months of 2007 increased by 11 percent year-on-year, soaring to a new high of P47.2 billion on the back of a 12 percent and six percent revenue growth from its wireless and wireline businesses.
Profitability remained strong with margins at 65 percent, bringing earnings before interests, taxes, depreciation and amortization (EBITDA) and earnings before interests and taxes (EBIT) to P30.5 billion and P17.7 billion, respectively.
Supported by a buoyant economy, Globe’s wireless business continued to benefit from strong sales efforts and targeted marketing initiatives, enabling the business to sustain double-digit subscriber growth across all its brands. Strong gross additions and effective churn management kept net additions above the one million mark for the fourth consecutive quarter, bringing total wireless SIM base to 19.2 million at the end of the third quarter. On the wireline front, broadband continued to be the driving force, with its subscriber base doubling versus last year’s to reach 109,000 contributing a total of P846 million in revenues.
“We are encouraged by the record performance of our wireless business, and are very excited by the rapid growth of our broadband business,” Gerardo Ablaza, Jr., president and CEO of Globe said. “We will remain focused on enhancing our brands’ value proposition, investing in new capacities to sustain growth and improve service quality, and transforming our processes to be attuned to the needs of our customers.”
Globe continues to find ways to make its products and services more affordable, easy to use, and relevant to its subscribers. The company sustained its highly popular unlimited text messaging, bulk voice, and discounted SIM offerings. In addition, Globe recently launched “Phonetastic” , a group plan for three which includes a regular postpaid plan with a monthly service fee of only P500 and two extension plans at P250. For the overseas workers and their families, Globe also launched an OFW Family Pack which bundles a local SIM for the Philippine-based family and a roaming SIM for the overseas-based member for only P120. On the broadband side, Globe has expanded its suite of packages to include a 512 kbps data connection for only P=995 , which can be upgraded to include a wireless landline for an additional P300.
On the infrastructure side, the company continued to make significant investments in capacity and network quality, spending P9.1 billion in capital expenditures for the nine months ended.
In its meeting yesterday, the board of directors declared a special dividend of P50 per common share payable to shareholders of record as of Nov. 20, 2007. A total of P6.6 billion in dividends will be paid on Dec. 17, 2007. This would bring total dividends paid out this year to P15.3 billion, including the regular dividends.
“With improved market position, record profitability and strong cash flows, we believe that a special payout was warranted, not only to bring us closer to our target capital structure, but also to enhance the returns of our valued shareholders,” Ablaza said.
Also, during yesterday’s meeting, the Globe board appointed Chang York Chye as director and co-vice chairman in place of Lim Chuan Poh who resigned effective Oct. 1. Chang will also replace Lim in the executive, audit, nomination, and compensation committees of the Board. Chang brings with him over 15 years of management experience in leading ICT companies. He joined Singapore Telecom in November 2005 as executive vice president of business which serves SingTel’s domestic and overseas corporate customers with a full range of cost effective telecommunication services and customized end-to-end solutions.