Globe income cut by almost half in Q1

MANILA, Philippines — Globe Telecom Inc. suffered a near 50 percent drop in earnings to P7.25 billion in the first quarter from P13.65 billion in the same quarter last year in the absence of gains from a data center agreement it executed in 2022.

Globe entered into a $350 million deal with Singapore-based ST Telemedia Global Data Centers last year for the development and operation of new data centers in the Philippines.

Globe made a P10.51 billion gain from the transaction and it was booked as income for the first quarter of last year as ST Telemedia subscribed new shares to Globe’s KarmanEdge Inc.

The telco improved its revenue by three percent to P45.03 billion, keeping its topline healthy in the face of economic risks and uncertainties.

Expenses, on the other hand, went up by two percent to P38.65 billion on increasing financing and operational costs.

Globe grew service earnings by two percent to P39.98 billion, while non-service income went up by 15 percent to P5.05 billion.

The wireless giant saw its revenues from the mobile and corporate segments go up, but sustained declines in the broadband and fixed line voice brackets.

Globe said that it really expected the broadband business to contract as subscribers move away from legacy products to adapt postpaid fiber.

On the other hand, it grew its non-telco portfolio again, solidifying its aspiration to become a tech giant through the digital platforms that it controls.

From January to March, earnings from non-telco ventures spiked to P1.4 billion on strong showings from ECPay, Yondu, and Asticom.

During the quarter, Globe invested P17.6 billion for capital expenditures, mainly to construct 220 cellular towers and upgrade of 3,000 mobile sites. Bulk or 90 percent of the spending went to projects that seek to meet the growing data requirements nationwide.

Globe president and CEO Ernest Cu believes that the telco can survive the economic uncertainties facing its business, optimistic that both telco and non-telco segments will deliver for the rest of the year.

“We are encouraged by the results in the first three months of the year with a healthy topline and EBITDA (earnings before interest, taxes, depreciation and amortization) growth amid high inflation, interest rates and other economic challenges,” Cu said.