Globe posts revenue growth despite rising costs

Globe Telecom reported a 3% increase in service revenues to Php162.3 billion in 2023, a new record high.

However, rising expenses led to a 29% decline in net income to Php24.6 billion.

The revenue growth was driven by strong mobile data consumption, growing corporate demand for ICT services, and expanding non-telco businesses.

Mobile service revenues rose 5% to Php112.4 billion, with mobile data revenues growing 9% to Php90.9 billion.

Corporate data revenues posted record highs, improving 7% to Php18.3 billion, powered by rising demand for cloud, cybersecurity and other IT solutions. Non-telco revenues expanded 18% to Php4.9 billion.

However, operating expenses (opex) and subsidy grew 3% to Php80.9 billion during the year due to higher utilities, repairs and maintenance costs. Similarly, depreciation charges were up 4% at Php47.4 billion as Globe continued investing in its network.

As a result, despite the healthy revenue growth, higher opex and depreciation dragged net income lower by 29% to Php24.6 billion. Excluding one-time gains reported last year, Globe’s normalized net income declined 4%.

Globe reduced its capital spending by 30% to Php70.6 billion in 2023, enabling it to improve capital efficiency.

As part of this, Globe trimmed its purchase orders to just $600 million, leading to lower capex commitments over the next few years.

Globe targets to further reduce capex spending below $1 billion by 2025.

The company believes bringing free cash flows to positive levels by 2025 is achievable due to Globe’s focus on optimizing capital spending.

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