The Philippines’ Globe Telecom today reported strong gains in profit and revenue in 2014, backed by solid performances across all its business units and a 14 per cent increase in mobile connections.
Globe’s core net profit expanded 25 per cent last year to PHP14.5 billion ($328 million) as overall service revenues rose 9 per cent to PHP99.02 billion. The growth was fuelled by a 7 per cent increase in mobile revenue, which accounted for 79 per cent of total turnover, as well as a 22 per cent jump in broadband revenue and a 17 per cent increase in fixed-line data. Even fixed-line voice managed to increase 7 per cent due to strong demand for bundled internet and fixed-line plans.
The country’s second largest mobile operator with a 39 per cent market share added 6.5 million mobile subscribers, bringing its total to 44 million. Its postpaid subscriber base rose more than 10 per cent to 2.26 million, while postpaid revenue increased 11 per cent to PHP29.9 billion. Prepaid revenue was up 5 per cent to PHP48.2 billion, and prepaid subscribers increased 15 per cent to 41.8 million.
Postpaid ARPU fell 3 per cent to PHP1,164 ($26.36); prepaid ARPU was down 7-8 per cent for its two brands.
Free Facebook offers in January to April and October to December led to a 14 per cent increase in average monthly mobile data revenue, the company said. For the year, mobile browsing and data revenue jumped 23 per cent to PHP14.3 billion.
SMS revenue, which accounted for 37 per cent of total mobile revenue, was up 1 per cent to PHP29.1 billion thanks to the popularity of bucket and unlimited promotions, which offset declines in regular and international SMS. Mobile voice revenue rose 7 per cent.
Its broadband user base expanded 37 per cent to 2.8 million, with sales of PHP12.68 billion accounting for almost 13 per cent of total revenue (up from 11.5 per cent in 2013).
Operating expenses and subsidies rose 11 per cent to PHP59.75 million as the company spent more on marketing and contract renewals, following the launch of the iPhone 6 and Samsung Note 4. The company said the higher expenses were partly offset by lower year-on-year interconnect costs, which fell 9 per cent to PHP8.43 billion.
Its EBITDA grew 8 per cent to PHP39.27, and its EBITDA margin was stable at 40 per cent. Lower depreciation costs last year (PHP1.6 billion vs PHP9.1 billion in 2013) and a fall in non-operating charges led to a 170 per cent jump in its net profit (after tax) to PHP13.4 billion.
The company has set aside $650 million for capex this year, which is the same level spent in 2014. But $200 million allocated for 2014 will be pushed to early 2015, raising capex for the year to $850 million. Three-quarters of the investment will be related to data, which includes LTE, HSPA+, DSL as well as domestic transmission and international cable capacity.
With the completion of a major 4G expansion project, Globe president and CEO Ernest Cu said its 3G and 4G networks now have 100 per cent population coverage.
The company is forecasting high single-digit revenue growth this year and its EBITDA margin to remain around 40 per cent, as the growth in its higher margin postpaid business offsets the increasing contribution of lower-margin data services.