Globe profit shrinks 11% to P11 billion

MANILA, Philippines — Telco-to-tech giant Globe Telecom Inc. is confident it would recover to growth mode in the second half, banking on the strength of core products and the expansion of new services.

Globe is eyeing to return to expansion mode in the second semester to flip its 11-percent decline in profit to P11.04 billion in the first half.

Globe chief finance officer Juan Carlo Puno said the telco is optimistic of its prospects in the remainder of the year, as revenues from core services are growing rapidly.

He said Globe plans to leverage its revenue momentum in the first half and expand further in the second. It also aims to be more measured with capital investments to keep cash flow positive.

Globe increased its revenue by six percent to P92.66 billion from January to June. It banked on the six-percent hike in mobile and broadband gains to anchor its revenue base.

In broadband, Globe grew its subscribers by 32 percent to more than two million, of which over half or 1.1 million came from its low-cost product GFiber Prepaid.

Further, Globe booked a 15-percent increase in corporate revenues, capitalizing on businesses in need of enterprise-grade solutions to elevate digital capabilities.

However, expenses also went up by six percent to P47.79 billion.

On top of this, Globe’s depreciation costs spiked by eight percent to P28.67 billion, attributed to ongoing efforts to build new infrastructure. It also started feeling the pang of its reduced stake in GCash, as the e-wallet welcomed new investor Mitsubishi Corp. last year.

GCash’s parent Mynt Inc. is scheduled to list on the Philippine Stock Exchange on Oct. 19. With GCash about to be public, Puno said Globe is looking to dress up another entity that has the potential to become larger.

For one, Globe’s data center builder ST Telemedia Global Data Centers (STT GDC) Philippines will reach a systemwide capacity of at least 30 megawatts by the end of the year.

Once this scale is attained, STT GDC Philippines will cement its position as one of the country’s biggest data center operators, adding a larger value to Globe’s portfolio.