“On a sequential basis, net income in the third quarter declined by 1 percent as the topline growth was weighed down by the increase in marketing and depreciation charges,” said the company in a filing yesterday.
The cellular firm’s service revenues in the third quarter hit an all-time high of P17 billion, up 13 percent over the same period last year while operating expenses and subsidiary during the period reached P7.997 billion.
Still, Globe managed to record revenues amounting to P49.987 billion at end-September or an increase of 9 percent from P45.8 billion in the same period last year. This brought Globe’s reported net income to P7.994 billion, up 7 percent from P7.4 billion last year, and its core profit to P8.176 billion or 15-percent higher than the P7.1 billion reported in September 2010.
Expenses during the nine month period rose by nine percent to P22.960 billion from P21 billion last year. The year-on-year growth in expenses was mainly due to higher marketing and subsidy, provisions, utilities and staff costs.
Growth in network-related expenses such as electricity, fuel, contracted services, and maintenance were driven largely by an expanded 2G, 3G and broadband networks. Marketing and subsidy expenses, on the other hand, were 19-percent higher year-on-year as a result of the aggressive acquisition campaigns, investments in brand-building, higher handset subsidies, and to support the product and service launches in the mobile business. This brought the ratio of marketing and subsidy to service revenues to 9 percent this period, up against last year’s level of 8 percent.
Total capital expenditures (capex) spent reached nearly P13.9 billion for the three quarters, driven by the continued investments in its broadband and mobile networks.
The company has allotted a significant portion of this year’s $500-million projected capex spend towards the expansion and upgrading of its mobile networks specifically on deploying 4G mobile technology and utilizing the global standard HSPA+ in key areas in nationwide. As of end-September, Globe has a total of 12,062 base stations and 6,580 cell sites to support its 2G, 3G and WiMAX services.
At end-September, Globe cellular subscribers reached 29.1 million while broadband subscribers increased to 1.4 million.
The strong take-up in broadband subscribers brought the company’s broadband revenues to P5.6 billion as of end-September, 35-percent above last year’s P4.1 billion.
The mobile business, meanwhile, delivered a 7-percent increase in revenue from P37 billion to P40 billion
“We are pleased to have sustained our momentum and extended our gains into this third quarter, despite a very challenging competitive environment,” said Globe President Ernest L. Cu. “Our mobile business has reversed the declines of last year, while our broadband business continues to deliver improved profitability with its growing scale.”
Globe’s priority for 2012 is to “execute well on our network and IT transformation programs to put us in a better competitive position and bring the business to higher growth.”
