Globe borrows P15 billion for capex, debt payments

MANILA, Philippines — Mobile giant Globe Telecom Inc. has borrowed P15 billion from Metropolitan Bank & Trust Co.  which will be used to finance its capital expenditures and settle expiring debts.

In a regulatory filing, Globe said that it borrowed P15 billion to fund its corporate requirements, debt payments and network expansion, even as it cut its capex guidance by 32 percent for the year.

Globe eyes to continue building up its portfolio to sustain its  first semester growth momentum.

Between January and June, Globe spent P37.7 billion on capex, 90 percent of which was placed on infrastructure to meet the growing requirements from its subscribers. The first half expenditure declined by 25 percent from P50.5 billion a year ago.

As of June, Globe  raised 542 new cellular towers and upgraded 5,087 sites to LTE. Further, it installed around 148,000 new fiber lines to support the broadband demand from consumers.

Likewise, the Ayala-led telco built 356 new 5G sites across the archipelago in the first semester, raising its outdoor coverage to 97.44 percent in Metro Manila and 91 percent in urban centers in Visayas and Mindanao.

On the financial side of the business, Globe is struggling to keep its profit up due to challenges on the macroeconomic front. As of June, its profit   dipped by 26 percent to P14.33 billion, as its expenses rose faster than its revenue.

As such, Globe revised its earnings outlook for the service segment, expecting it to grow by just mid-to low single-digit for 2023. The telco blamed elevated inflation as one of the factors as subscribers took a beating in the first quarter when inflation peaked at 8.7 percent in January.

Globe is slashing its capex to $1.3 billion this year from a record $1.9 billion in 2022, as it looks to revert its cash flow to sustainable levels..