Globe Telecom Q3 net income rises 3.5% to P5.44 billion on higher revenues, property disposal gains

Globe Telecom reported a 3.5% rise in third-quarter attributable net income to P5.44 billion, driven by higher revenues and increased gains from property and equipment disposals. Gross revenues grew 5.2% to P46.68 billion, while gross expenses rose 7.7% to P43.31 billion.

GLOBE TELECOM, Inc. posted a 3.5% increase in attributable net income for the third quarter to P5.44 billion, up from P5.25 billion a year earlier, supported by higher revenues and gains from the disposal of property and equipment. The Ayala-led telecommunications company disclosed the results in a stock exchange filing on Tuesday.

Gross revenues for the July-to-September period rose 5.2% to P46.68 billion from P44.36 billion in the same period last year. Gains from the disposal of property and equipment surged to P1.09 billion from P96.9 million a year earlier, while the company's share in the net income of joint ventures and associates climbed 14.5% to P1.75 billion from P1.53 billion. However, gross expenses increased 7.7% to P43.31 billion from P40.23 billion, reflecting higher general, selling and administrative expenses, depreciation, and finance costs.

“As we enter the final quarter, we are mindful of the persistent inflationary pressures and tighter household budgets, which could weigh on consumer spending and Globe’s overall performance,” said Globe President and Chief Executive Officer Carl Raymond R. Cruz. “Nevertheless, connectivity remains an essential household expenditure, and we are encouraged by the prospect of stronger seasonal demand in the fourth quarter, which could help mitigate these pressures and support our growth momentum.”

For the nine months ended September, Globe’s attributable net income declined 6.9% to P16.47 billion from P17.69 billion a year earlier, weighed down by higher net interest expenses and nonrecurring gains recorded in the previous year from tower sales and the dilution of its investment in Mynt, Inc. Despite the decline, gross revenues rose 5.9% to P139.34 billion from P131.59 billion, supported by growth across its mobile, home broadband, and corporate data businesses. Service revenues increased 6% to P128.99 billion from P121.68 billion, while nonservice revenues reached P10.35 billion, up 4% from P9.91 billion.

Mobile services accounted for the largest share of service revenues at P91.37 billion, up 6% year on year, driven by sustained demand for mobile data. Mobile data revenues rose 10% to P81.22 billion, representing 89% of total mobile service revenues during the nine-month period. Mobile data traffic increased to 5,705 petabytes from 4,846 petabytes a year earlier, while average monthly data consumption per subscriber rose to approximately 17 gigabytes from 15 gigabytes. Home broadband revenues increased 6% to P18.86 billion, supported by continued growth in fiber broadband services, while corporate data revenues climbed 10% to P16.52 billion on demand for connectivity and information and communications technology solutions. Fixed-line voice revenues declined 1% to P935 million as customers continued shifting toward data-based services. Nontelecommunications service revenues fell 24% to P1.31 billion following the deconsolidation of NCS Philippines, formerly Yondu, Inc., after Globe reduced its ownership stake to 49% in January.

For the January-to-September period, Globe’s gross expenses increased 7.6% to P129.15 billion from P120.08 billion a year earlier. Total operating costs and expenses, including subsidies and depreciation, rose 7% to P104.2 billion from P97.5 billion, attributed to higher utility costs, supplies, lease-related expenses, repairs and maintenance, interconnection charges, staff costs, and marketing and subsidy expenses. Depreciation and amortization expenses rose 8% to P43.27 billion from P39.98 billion, reflecting continued investments in network assets and digital infrastructure. Globe’s earnings before interest, taxes, depreciation, and amortization increased 6% to P68.03 billion from P64.19 billion, while its core net income remained broadly unchanged at P15.5 billion.

Globe continued to benefit from the earnings contribution of Mynt, the financial technology company behind GCash, which accounted for 28% of its net income before tax during the nine-month period, supported by increased adoption of its payment and lending services. Capital expenditures rose 14% to P35.8 billion in the first nine months, with approximately 89% allocated to data-related requirements, including network quality, capacity, and digital infrastructure. The company maintained its full-year capital expenditure guidance of below $1 billion. As of end-September, Globe’s total debt stood at P272.1 billion. At the local bourse on Tuesday, Globe shares fell P5, or 0.34%, to close at P1,459 apiece.