YEAR 2019 RESULT
2020 IS SEEN AS ANOTHER RECORD YEAR IN TERMS OF REINVESTMENT, AS GLOBE SERVES OVER 96 MILLION CUSTOMERS NATIONWIDE AND COMMITTING TO P63.0 BILLION IN CAPEX IN 2020
In 2019, Globe Telecom Inc. spent a record capex of P51.0 billion or around US$989 million, 18% higher than a year ago and represents 34% of gross service revenues and 67% of full year EBITDA. Bulk of the all-time high spend went to data-related requirements, comprising 79%, as the Company continued to invest in the Philippines towards enabling Filipino families and businesses.
This record spend allowed Globe to make significant gains and fast-track its network rollout during the year. As of December 2019, the Company put up 139% more sites versus 2018 and also added more 3G and 4G base stations, putting up 28% more than last year. These gains benefitted customers as evidenced in the latest results of 3rd party network quality test providers, which showed that Globe’s LTE download and upload speeds, and latency in the 4th quarter of 2019 improved nearly 16%, 6%, and 9% respectively, compared to the same period last year. Moreover, these improvements were achieved despite a 58% growth in mobile data traffic over the same time period. To sustain this momentum, Globe is committed to spend P63.0 billion in capital expenditures in 2020, which includes spill over of capex committments from 2019.
Riding on these network improvements, Globe closed the year with consolidated service revenues of P149.0 billion, 12% higher from a year ago. This growth was fueled by the gains from data across mobile, broadband and corporate data services. Total data revenues now account for 71% of total service revenues versus 61% reported last year, as more Filipinos adopt the digital lifestyle. Consolidated EBITDA stood at P76.0 billion with EBITDA margin reaching 51% (from 49% in 2018). Consolidated net income totaled P22.3 billion, up 20% from a year ago. Core net income likewise posted a year on year increase of 20% from P18.7 billion in 2018 to P22.5 billion this period.
“2019 proved to be another good year for Globe despite the changing industry environment. We ended 2019 with a positive set of financial results and more importantly significant gains on the network front. These results serve as a springboard for the opportunities and challenges that lay ahead, and will help us better serve our expanded mobile and broadband customer base of over 96 million. We will continue this momentum through 2020 as we remain committed to our goal of delivering first-world internet connectivity to the Philippines.” Ernest L. Cu, President and CEO of Globe Telecom Inc., stated.
For the Mobile business, revenues posted P111.8 billion or up by 12%, surpassing the P99.5 billion reported a year earlier. As the mobile segment continued to dominate the Philippine market, mobile revenues remained the largest revenue contributor, accounting for 75% of the total service revenues led by the Company’s Prepaid brands. Total mobile subscriber base is now at 94.2 million, up 27% from 2018.
From a product perspective, mobile data revenues generated P71.8 billion in 2019 from nearly P51.0 billion last year, mainly driven by the surging demand for video streaming, gaming apps and social media, further boosted by the compelling promotions for higher-value data centric plans. Mobile data now accounts for 64% of mobile revenues from 51% a year ago. Mobile data traffic likewise leapt from 956 petabytes in 2018 to 1,699 petabytes in 2019, a 78% growth year-on-year. Meanwhile, mobile voice and mobile SMS revenues for the period ended at P24.3 billion and P15.7 billion, lower year-on-year by 15% and 22%, respectively, as usage continues to shift towards IP/OTT-based communications.
For the Home Broadband business, revenues reached P21.7 billion this period, surpassing last year’s P18.6 billion by 17%, driven by a rising level of fixed wireless broadband users reaching close to 1.4 million (up 40% year-on-year). Total home broadband subscriber base now stands at over 2.0 million, up 25% from a year ago. The rising popularity of Home Prepaid Wi-Fi and compelling broadband plans bundled with the best local and international content fueled @Home broadband’s continued success. The launch of the commercial pilot for At Home Air Fiber 5G services further expanded Globe’s product suite, offering new connectivity options to deliver high-speed broadband access to its broadband customers.
Corporate Data revenues reached P12.8 billion as of end-December of 2019, up 9% from the P11.8 billion reported in 2018. This was propelled by the higher circuit count coupled with the increase in usage for both internet and domestic services. Revenue levels were also supported by the enterprise clients’ increasing demand for digital-enabling services to support their digital transformations, as more and more businesses pursue their digitalization journey.
Supporting these revenue streams, Globe’s total operating expenses including subsidy posted close to P73.0 billion for the period, or an 8% increase from a year ago, leading to consolidated EBITDA to end the year at P76.0 billion, up 17% from 2018.
As a result of the top line growth, which fully covered the increases in operating costs, depreciation charges and non-operating expenses, net income stood at P22.3 billion, or up 20% from the year before. Accordingly, core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, stood at P22.5 billion, 20% higher year-on-year.
Lastly, on the mobile money front, GCash continued to promote financial inclusion and expand the mobile money ecosystem, ending the year with 75,000 QR merchants, 30,000 cash-in points and 400 partner billers who accept GCash payments. On top of the ecosystem expansion, GCash also introduced several innovations in 2019 to further drive engagement, bring more financial services to the underserved and unbanked. One such innovation is GSave, a digital savings account that can be opened straight from the GCash app. Not only does GSave allow first time depositors to participate in the formal banking segment, it also provides a very competitive offer with interest rate of up to 4% interest per annum, with no minimum initial deposit or maintaining balance requirement. GCash also launched GCash Forest, an exciting “green” feature on the app that taps the interest in social causes among its users. GCash Forest allows users to collect green energy earned from cashless transactions and enables them to plant virtual trees that will have real- life counterparts. As of end-December of 2019, total GCash Forest users reached 1.7 million.
Recent Developments:
On January 20, 2020, Globe received the approval of the Securities and Exchange Commission (SEC) on the incorporation of Telecommunications Connectivity lnc. This is to enable number porting services in line with the new Republic Act 11202 also known as the “Mobile Number Portability Act” (“the MNP Act”).
