Globe Reports P5.6-B Core Income

Sustaining growth in its mobile and broadband businesses, Globe Telecom, Inc. netted core earnings of P5.6 billion for the first half of 2011, up 8 percent versus the same period last year. Its year-to-date consolidated service revenues reached P33.0 billion, 7% higher than the P30.7 billion registered last year. Despite unrelenting competition, price pressures from the market’s continued shift towards value offers and the negative impact of the strong peso on US dollar-linked revenues, the carrier’s mobile business posted 5 percent growth, hauling in P26.2-billion revenues in the first semester versus last year’s P25.0 billion. Total mobile subscriber base stood at 28.4 million, up 15% from last year. Overall, subscriber growth pushed the telco’s broadband revenues by 42% to 3.6 billion from P2.6 billion last year. In line with the company’s dividend policy of distributing 75% to 90% of prior year’s net income, the Board of Directors declared the second semi-annual cash dividend of P31 per common share, payable on September 19, 2011 to shareholders on record as of August 22, 2011. This brings total cash dividend payment this year to P62 per share or P8.2 billion which translates to about 84% of 2010 net income. Consolidated EBITDA (earnings before interest, taxes depreciation and amortization) in the first semester stood at P18.0 billion, 6% higher than last year’s P17.0 billion. Operating expenses and subsidy grew by 9% from P13.8 billion to about P15.0 billion with higher marketing and subsidy expenses for acquisition and retention programs as well as increased network costs and outsourced services in expanding its mobile and broadband networks. Consolidated EBITDA margin remained steady at last year’s level of 55% with broadband and fixed line margins improving to 25% from 15% last year, compensating for the decline in mobile margins which fell to 62% from 65% in 2010. Consolidated net income after tax increased by 9% year-on-year from P5.1 billion to P5.5 billion as revenue growth compensated for overall rise in operating expenses and subsidy, depreciation, and non-operating charges. Excluding foreign exchange, mark-to-market gains and losses as well as non-recurring items, core net income posted an 8% growth from P5.2 billion last year to P5.6 billion this period. Against last quarter, service revenues rose by 1% with both mobile and broadband revenues improving. Consolidated EBITDA was down 2% from P9.1 billion to P9.0 billion with the 3% rise in operating expenses and subsidy outpacing the 1% increase in service revenues.