Globe income dips 5% in first 6 months

QUARANTINE restrictions imposed to curb the spread of the coronavirus disease 2019 (Covid-19) in the country pulled down listed Globe Telecom Inc.’s earnings by 5 percent IN THE fiRST HALF OF 2020.

In a disclosure on Tuesday, the Ayala-led telecommunications giant said its net income declined to P11.5 billion from P12.04 billion in the same period last year, while consolidated service revenues dropped to P72.42 billion from P72.87 billion.

Only revenues from its Globe at Home broadband business grew, jumping by 19 percent to P12.51 billion in the six months ending June from P10.55 billion.

Revenues from its mobile segment reached P51.83 billion, 5 percent lower than P54.39 billion a year earlier. Corporate data also slipped by 3 percent to P6.2 billion from P6.36 billion. Globe’s fixed line voice declined by 7 percent to P1.3 billion from P1.39 billion.

Earnings before interest, taxes, depreciation and amortization stood at P38.38 billion, lower than P38.58 billion a year ago.

“While we expect revenues for fullyear 2020 to decline by low single digits [from] last year, given the impact of [the] community quarantine restrictions, we do see growth opportunities on the home broadband front and ICT (information and communications technology) space,” Ernest Cu, Globe president and chief executive officer, was quoted as saying in the disclosure. “Higher demand for internet connectivity and cloud solutions are expected as companies have been forced to embrace remote working for employees and to fast-track their digitalization efforts. Mobile data and digital solutions will also increase traction with more customers adopting a digital lifestyle in the new normal,” he added.

Globe also revised downward its capital expenditure guidance for 2020 to P50.3 billion from the initial P63 billion, “given the delays in the rollout” during the quarantine period.

The disclosure comes after President Rodrigo Duterte, in his fifth State of the Nation Address on July 27, threatened Globe and its chief rival Smart Communications Inc. that their assets would be seized if they failed to improve their services by December.

“I call on our [telecommunication] companies to improve their services, lest we be forced to take drastic steps to address the less-than-ideal service that the public is getting from you,” he said in his speech, telling them to “bear that in mind, because the patience of the Filipino people is reaching its limit, [and] I will be the one to articulate the anger of the Filipino people. And you might not want what I intend to do with you.”

In response, Globe Senior Vice President for Corporate Communications Yoly Crisanto said her company would heed “the call of the President to improve telco services.”

She added that “service performance and increased consumer demand for data are the key reasons why we have been investing billions of dollars to upgrade and improve our network.”

Globe shares increased by 2.78 percent or P56 to close at P2,070 each on Tuesday.