Globe’s 2020 income down 13% due to pandemic

By Arjay L. Balinbin, Senior Reporter

GLOBE TELECOM, Inc. posted a 13.04% decline in its core net income for 2020 mainly due to the impact of the coronavirus pandemic on its businesses except for the home broadband.

The listed Ayala-led telco’s core net income for 2020, which excludes the impact of non-recurring charges, foreign exchange and mark-to-market charges, went down to P19.52 billion from P22.45 billion in 2019.

Full-year service revenues from mobile, home broadband, corporate data, and fixed line voice decreased 1.76% to P146.39 billion from P149.01 billion in the previous year.

Broken down, mobile revenue declined 7.08% to P103.11 billion from P110.97 billion, while broadband revenue jumped 23.23% to P26.80 billion from P21.75 billion.

Globe President and Chief Executive Officer Ernest L. Cu said at a virtual media briefing that the main driver of Globe’s performance in 2020 was the home broadband segment, as most subscribers stayed home.

The company’s EBITDA (earnings before interest, taxes, depreciation and amortization) for 2020 totaled P73.51 billion, down 3.31% from P76.03 in the previous year.

Core net income for the fourth quarter decreased 14.75% to P3.91 billion, as service revenues went down 2.90% to P37.28 billion from P38.40 billion posted in the same period in 2019.

Broken down, Globe saw its fourth-quarter mobile revenue decrease 10.31% to P25.80 billion from P28.77 billion reported in the same period in 2019, while home broadband revenue grew 27.75% to P7.25 billion from P5.68 billion in the previous year.

The listed telco saw its fourth-quarter EBITDA decrease 5.05% to P17.26 billion from P18.18 billion posted in the same period in 2019.

Mr. Cu said the company is optimistic about regaining momentum this year as the Philippine economy continues to recover.

At the same briefing, Globe Chief Finance Officer Rizza Maniego-Eala said the company expects its revenues to increase by “low to mid single digit” from 2020 level.

For 2021, Globe has set a capital expenditure (capex) budget of about P70 billion, higher than last year’s revised capex guidance of P50 billion.

“This year will likewise be impacted by the upswing in depreciation charges given the elevated capex programs,” the company said in an e-mailed news release on Wednesday.

As for the competition this year with the expected commercial rollout of telco startup DITO Telecommunity Corp., Mr. Cu said: “I think, on the mobile side, the competition will remain pretty much the way it is…”

“Where the competition will come, I think, will be in the fixed lines base,” he noted. “With Converge (Converge ICT Solutions, Inc.) having very significant builds alongside with PLDT, Inc. and Globe, what was once a free area for Converge to play has now become a crowded area.”

Meanwhile, e-wallet GCash, operated by Globe’s fintech arm Mynt (Globe Fintech Innovations, Inc.), announced separately that the tax payments processed on its platform last year had surged by 286%, “leading to close to P1.5 billion in tax collections.”

Globe noted its “lower share in equity losses of Mynt is seen to continue” this year.

“No additional asset impairment is expected for 2021,” Globe added.

Mynt recently raised more than $175 million in fresh capital from investment firm Bow Wave Capital Management and its existing shareholders in multiple tranches, with post-money valuation of the final tranches at close to $1 billion.

Globe Telecom shares closed 1.90% higher at P2,038 apiece on Wednesday. — Arjay L. Balinbin