MANILA, Philippines - Globe Telecom said yesterday its core net income grew 11 percent to P10 billion in 2011, from P9.1 billion the previous year, despite intensified competition in the local telecommunications industry.
With record high service revenues offsetting the rise in operating expenses and depreciation, core net income rose while reported net income improved slightly to P9.8 billion as prior year’s results included P526 million in non-recurring adjustments pertaining to prepaid load credits that have either expired or have been used up.
Globe closed the year with record high service revenues of P67.8 billion, nine percent higher than the previous year’s normalized level of P62 billion.
“We are pleased with the overall gains we have achieved in 2011, and the momentum that it provides us going into 2012. The investments we have made in acquiring quality subscribers, revitalizing our brands, and enhancing customer service, put us in a good position to sustain the growth of our businesses in the coming year,” Globe president and CEO Ernest Cu said.
He pointed out that the next two years will be a critical period for Globe as it executes on its network modernization programs and improves its business support systems and processes.
“Our network and lT transformation program is an ambitious and yet necessary undertaking which will provide the platform that will make us even more competitive in this fast-moving market,” Cu added.
Meanwhile, in line with Globe’s amended dividend policy of distributing between 75-90 percent of the prior year’s core net income, Globe declared its first semi-annual cash dividend of P32.50 per common share, payable on March 16, 2012 to shareholders on record as of Feb. 24,2012.
Also, to finance capital expenditures for 2012 including investments related to its network modernization and lT transformation program, Globe announced that its board of directors approved the plan to undertake a P15-billion retail bond program which is expected to provide Globe with the option to tap the retail market in one or more tranches over the next 12 months. As registered securities, the bonds will be offered to both institutional and retail investors.
Global consolidated service revenues in 2011 reached an all-time high of P67.8 billion as mobile revenues beat market expectations with an eight percent year-on-year growth, driven by the record acquisitions in the postpaid segment, competitive value offers in the prepaid brands, and robust growth in mobile browsing services. This was despite peaking penetration rates, persistent price pressures and declining yields resulting from subscribers’ continued preference for unlimited and bucket offers, as well as the negative impact of the strong peso on dollar-linked revenues.
Revenues from the fixed fine and broadband businesses likewise grew 15 percent from the prior year, supported by the 31 percent expansion in broadband subscriber base and sustained revenue contribution from the fixed line data segment.
The mobile business delivered strong results across all postpaid and prepaid brands, while the broadband business continued to register double-digit revenue growth, riding on the strength of the Tattoo brand and the rising demand for fast and reliable Internet connectivity.
Full year mobile revenues exceeded market expectations to close the period at about P54 billion, up eight percent year-on-year, underpinned by the record acquisitions for customizable postpaid plans, growth in unlimited services and all-network offers, and additional revenues from mobile browsing.
Broadband revenues rose to P7.5 billion, up 30 percent from the previous year, driven by a growth in subscriber base, and the introduction of new and enhanced services enabled by the expansion of sales channels and the company’s 4G HSPA+ network.
In the fourth quarter of 2011, Globe also registered record high consolidated service revenues of P17.8 billion, marking the fifth quarter of sequential growth. The mobile business sustained its growth momentum with service revenues up six percent from P13.5 billion in the third quarter to P14.3 billion in the closing period. This is on the back of strong subscriber acquisitions, improved top-ups for prepaid brands, and overall rise in usage with the seasonal lift.
The fixed line and broadband business also delivered incremental revenues, rising to P3.6 billion in the fourth quarter from P3.5 billion in the third period following sustained growth in Tattoo Broadband On-the-Go services.
The company’s postpaid business delivered record net subscriber additions in 2011, enabling it to close the year with nearly 1.5 million subscribers, 36 percent above the previous year’s level of about 1.1 million.
Globe Prepaid and TM also closed the year with total subscribers of 15.5 million and 13.1 million, 12 percent and 13 percent higher than 2010 levels, respectively.
At year-end, the company’s total broadband subscriber base stood at 1.4 million, up 31 percent from about 1.1 million in the previous year. - By Mary Ann Ll. Reyes