Globe Telecom Inc. has decided to cut its capital expenditure (capex) program by a fifth to P50.3 billion, from P63 billion, due to limitations on mobility that brought delays to its network rollout plans.
Ernest L. Cu, the company’s president, said the group has so far spent P20.9 billion of the programmed capex for the year. The amount represents 29 percent of its revenues and 54 percent of its earnings before interests, taxes, depreciation, and amortization (Ebitda).
“Globe’s network has withstood and continues to prove its resilience during this Covid-19 pandemic. Our priority to keep our network up to speed has allowed us to continuously serve our customers and ensure that communities stay connected during these tough times,” he said.
Cu also reported that Globe’s net income in the first half declined by 5 percent to P11.5 billion from P12 billion the year prior, as a result of higher depreciation consolidated brought about by continued network investments.
Service revenues were almost flattish at P72.4 billion, while total operating expenses including subsidy remained at P34 billion. Its core net income, also affected by higher depreciation costs, stood at P12 billion, or an 8-percent decline from a year ago.
“While we expect revenues for full year 2020 to decline by low single digit against last year, given the impact of community quarantine restrictions, we do see growth opportunities on the home broadband front and ICT space,” Cu said.
Higher demand for internet connectivity and cloud solutions, he added, is expected, as companies have been forced to adapt 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. Despite the challenges, we are confident in our effective cost management efforts, to keep our Ebitda at around the 50-percent level, ensuring the sustainability of our operations and services.”