Globe Telecom posts 12% growth in 9-month profits


Posted at Nov 06 2009 06:20 PM | Updated as of Nov 07 2009 02:31 AM

MANILA - Ayala-led Globe Telecom Inc. reported a net income of P9.9 billion for the first 9 months of the year, 12% higher than last year's P8.8 billion.

In a statement, the country's second-largest telecommunications firm said this was driven mainly by an after-tax gain of P398 million from an equipment exchange transaction with a supplier, and a lower tax rate of 30% from last year's 35%.

Excluding foreign and mark-to-market gains and losses, and non-recurring items, Globe's core net income for the 9-month period held steady against last year at P9.4 billion.

Consolidated revenues as of end-September, meanwhile, inched up 1% to P46.9 billion.

Globe closed the first 3 quarters with 23.1 million subscribers, slightly lower than the 23.7 million recorded in the same period last year. The company said it continued to churn out marginal subscribers and focused on acquisition drivers towards better-quality mobile phone users.

This shift in acquisition focus, which Globe announced last August, has translated to some early gains. For one, Globe said its mass market brand Touch Mobile (TM) recorded higher revenues and ARPUs (average revenue per subscriber) despite a contraction in its SIM base.

"We will strengthen our brand portfolio through innovative and affordable product offerings, resume the growth of our subscriber base through quality acquisitions, while continuing to upgrade and improve the robustness of our network," Globe President and Chief Executive Officer Ernest Cu said.

Quarter-on-quarter, however, Globe's net income slipped 20% to P2.6 billion. Service revenues from July to September also dropped 3% from the P15.73 billion recorded in the second quarter.

Meanwhile, Globe said its broadband business continued to gain momentum as its subscriber base grew almost 3-fold to over half a million users. Service revenues also improved by 69% to P2.2 billion as of end-September from last year's P1.3 billion.

"We are very pleased with the significant headway we have made in the broadband space. We will accelerate our broadband capacity build to capture the growing demand for the service, and to solidify the gains we have attained so far," Cu said.

Last month, Globe launched the "Bangon Pinoy" program to help its subscribers, employees, and business partners recover from the effects of recent storms. The project provided rebates to affected users, community-rebuilding activities, and ongoing network repairs to improve service.

The company' board of directors has also declared a special dividend of P50 per common share, with a total of P6.6 billion in dividends to be paid out next month to stockholders of record as of November 20. This would bring total dividends paid out by Globe this year to over P15 billion.

Aside from this, Globe said its board has also resolved to increase the payout of regular dividends to as much as 90% of prior year's net income from the current 75%. This, the company said, would take effect next year.