The Globe Group’s consolidated service revenue for the nine months ended September 30, 2022 hit another record at ₱118.0 billion. It is up 3% year-on-year led by corporate data and mobile services, supplemented by the sustained growth from non-telco services. Total data revenues as a percentage of total consolidated service revenues likewise grew to 81% from 79% last year. This was revealed in a press conference yesterday.
Mobile business achieved strong revenue growth this period at ₱80.6 billion compared to ₱78.4 billion reported in the first nine months the previous year. This represents Globe’s second-highest nine-month mobile revenue, bested only by pre-pandemic high in 2019. The revenue improvement came mostly from prepaid given the rapid rise of digital adoption among Filipinos. Total mobile revenues comprised 68% of the total service revenues, with the total mobile customer base expanding to 87.9 million, or 5% higher from a similar period last year.
From a product view, mobile data revenues grew by 8% to reach a record ₱62.5 billion in the first nine months of the year from ₱57.9 billion in the same period of 2021. Mobile data traffic likewise jumped to 3,365 petabytes as of end-September of 2022, surpassing the 2,730 petabytes reported in the preceding year. Mobile data now accounts for 78% of mobile revenues versus 74% last year. Furthermore, mobile voice and mobile SMS revenues ended at ₱11.4 billion and ₱6.7 billion, lower year-on-year by 14% and 7%, respectively.
With Globe’s increased fiber footprint, postpaid fiber subscribers and revenues posted 64% and 108% growth year-on-year. However, the increasing fiber adoption among its customers drove the continued migration of HPW subscribers to fiber. Despite the improvement in fiber revenues, Home Broadband business slid further in the third quarter, bringing its total revenues for the first nine months of 2022 to only ₱20.5 billion from ₱22.4 billion a year earlier. Total Home Broadband subscriber count now stands at 2.7 million or down by 27% year-on-year. Similarly, HPW data traffic declined to only 355 petabytes as of the first nine months of 2022 from 628 petabytes a year ago.
Corporate Data soared to another record level revenues of ₱12.5 billion or 21% increase from a year ago and significantly higher from pre-pandemic level (up 31% vs. 9M ’19). This was mainly due to the strong traction from information and communication technology (ICT) services which grew 96% year-on-year. Growth from ICT was largely from business application services, cloud services and data center.
As Globe strengthens its foundation of going beyond telco, non-telco revenues jumped to ₱2.8 billion in the first nine months of the year, up 101% from the year earlier. Substantial revenue contributions from ECPay, Yondu, and Asticom led to this period’s outstanding performance.
Total operating expenses including subsidy stood at ₱57.6 billion for the first nine months of 2022, or flat year-on-year. The increase from almost all expense line items were offset by the declines from marketing, lease and services.
Consolidated EBITDA rose 6% year-on-year in the nine-month period to a record ₱60.3 billion, with the topline increasing by 3% and flat total operating expenses (including subsidy). This enabled overall EBITDA margin to increase to 51% from last year’s 50%.
With higher EBITDA and lower non-operating expenses, which fully covered for the increase in depreciation charges, net income reached ₱26.5 billion or 48% higher than the ₱18.0 billion reported in the similar period in 2021. Total non-operating income of ₱6.6 billion as of end-September this year was attributed to the one-time net gain of ₱8.4 billion (post-tax) on the partial sale of Globe’s data center business reported in the first quarter and the net gain of ₱1.4 billion (post-tax) from the sale and leaseback of its tower assets.
Excluding this one-time gain, normalized net income would have been ₱16.7 billion, or up by 6% year-on-year. Accordingly, core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, ended at ₱16.0 billion for the period. Similarly, normalized core net income was flat year-on-year.
Globe’s balance sheet remained healthy and gearing comfortably within bank covenants despite the increase in debt from ₱210.1 billion as of end-December 2021 to ₱248.4 billion this period. Globe’s gross debt to equity is at 1.94x while gross debt to EBITDA is at 2.62x; Net debt to equity ratio is at 1.86x while net debt to EBITDA is 2.50x; and debt service coverage ratio is at 3.79x.
“We are pleased with the Globe Group’s performance amidst the challenging economic climate and rapid changes in our industry. We believe that our decision to pivot and expand our growth opportunities through non-telco services has paved the way for us to remain relevant and competitive. We will stay committed to our promise to improve our network and come up with new products and services to meet the changing needs of the market and support Filipinos’ digital enablement. Looking ahead, we are confident that our digital transformation will enhance shareholder value and unlock Globe’s sustainable growth trajectory.” Ernest L. Cu, President and CEO of Globe Telecom Inc., commented.