Globe posts record quarter revenues of P17 billion, up 3%

As its mobile and broadband business kept on growing, Globe Telecom, Inc.’s consolidated service revenues hit an all-time high of P17 billion in the third quarter this year, 3% higher than previous quarter’s record of P16.6 billion. The telco closed the first nine months of 2011 with P50.0 billion consolidated service revenues , up 9% from P45.8 billion in the same period last year. Mobile revenues rose to P39.7 billion as of end-September, up 7% from last year’s P37.0 billion. Consolidated net income after tax rose 7% from P7.4 billion last year to nearly P8.0 billion as of September. Revenue growth compensated for the overall rise in operating and depreciation charges as well as non-operating expenses. Excluding foreign exchange and mark-to-market gains and losses, core net income increased by 15% from last year’s P7.1 billion to P8.2 billion this period. On a sequential basis, consolidated EBITDA was steady against second quarter’s level of about P9.0 billion. The 3% growth in consolidated service revenues offset the 5% rise in operating expenses and subsidy. Net income after tax was at around P2.5 billion, with the quarter-on quarter increase in depreciation expense offsetting the improvement in non-operating charges. Globe Postpaid set a record high of over 116,000 additional subscribers in the third quarter, while Globe Prepaid and TM contributed over 341,000 and 226,000 respectively to bring Globe’s cumulative subscriber base to 29.1 million at the end of September, 15% better than last year’s 25.4 million and last quarter’s 28.4 million. The mobile business contributes close to 80% of Globe’s consolidated revenues. Strong take-up for the telco’s customizable postpaid plans, all-network offers as well as unlimited voice and SMS (short messaging system) promotions were the key contributors to this period’s growth. The broadband and fixed line business also posted strong revenue growth as of end-September, improving 16% year-on-year from P8.8 billion to P10.3 billion. Sustained demand for Internet services coupled with the entry of more affordable access devices enabled Globe to grow its retail broadband business, while the steady demand from the outsourcing and offshoring industry also boosted revenues for the fixed line data business. Broadband subscribers increased to 1.4 million, 35% and 5% above last year and last quarter, respectively. Subscriber growth was fueled by Tattoo Broadband On-the-Go, the company’s nomadic broadband services. This brought broadband revenues to P5.6 billion as of end- September, 35% above last year’s P4.1 billion. Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) stood at P27.0 billion at the end of September and was 9% higher than last year’s P24.8 billion. Operating expenses and subsidy increased 9% year-on-year from P21.0 billion to P23.0 billion due mainly to higher marketing and subsidy costs related to the Globe’s acquisition, retention, and brand-building programs. Network-related expenses also rose to support an expanded mobile and broadband network. Revenue growth cushioned the impact of higher operating costs, resulting in consolidated EBITDA margin of 54% steady against last year. “We are pleased to have sustained our momentum and extended our gains into this third quarter, despite a very challenging competitive environment,” noted Ernest L. Cu, President and CEO of Globe Telecom, Inc. “Our mobile business has reversed the declines of last year, while our broadband business continues to deliver improved profitability with its growing scale,” he elaborated. “We have made good progress against the priorities we laid out in the beginning of the year. Our priority in the coming year is to execute well on our network and IT transformation programs to put us in a better competitive position and bring the business to higher growth.”