Globe Announces 2nd Quarter & First Half 2021 Results

Globe invested a record level of capital expenditure of ₱43.3 billion in the first half of 2021 to improve its network infrastructure and internet connectivity, beating last year’s spending by 107%. This capex  investment represents 57% of gross service revenues and 116% of EBITDA. Majority or about 88% of the  capex spending went to data network builds to address and elevate customer experience in this challenging  time. Globe’s aggressive network expansion and network modernization from 3G to 4G LTE/5G as well  as fiber technology available to more customers nationwide, is part of its strategy to make high-speed  connectivity accessible for all and usher the Philippines closer to being a digital nation. Globe is fully  committed to support 10 of the United Nations Sustainable Development Goals, such as UNSDG No. 9 on  building resilient infrastructure, promoting sustainable industrialization and fostering innovation.  

As of the first half of the year, Globe made significant strides in its network expansion with 641 new cell  sites, and 8,175 site upgrades which include both 4G LTE and 5G. On the fixed line front, Globe already  surpassed the 600,000 FTTH lines delivered in 2020, connecting more households all over the country to  fiber. Globe has also been aggressively migrating its customers to 4G LTE or 5G technology with SIM  and device offers nationwide. As a testament to Globe’s improved services to its customers, Ookla®’s recent SpeedtestⓇ data showed that Globe remained the leader in nationwide mobile consistency for two  consecutive quarters. The Consistency Score in Q1 2021 was 70.43 and Q2 2021 was 75.981, still ahead  versus competition. 

Moreover, the 2021 International Finance Awards (IFA) recognized Globe Telecom as the “Fastest  Growing 5G Network Service Provider.” The IFA for telecom seeks to validate the efforts of every  contender that is technologically advanced and provides cutting-edge connectivity to customers all over the  world. As the pioneer in 5G in the Philippines, Globe’s 5G outdoor coverage is now 92% in the National  Capital Region (NCR), expanding to a total of 1,759 sites including Bacolod, Boracay, Cebu, Iloilo,  Cagayan de Oro, Davao, General Santos and Zamboanga City as of end-June this year. Furthermore, with its quest to achieve the widest 5G coverage worldwide, the Company officially cemented its partnership  with more international telcos during the second half of 2021 (i.e., USA-based AT&T, Canada-based Telus, South Korea with KT Corp, Mobily of Saudi Arabia, Italy’s Telecom Italia, China’s China Unicom,  Vivacom in Bulgaria, Viettel of Vietnam and China Mobile). Globe will continue to launch its 5G Roaming  services to more international destinations across Asia, North America, and Europe to give the best possible  5G network experience to Filipino workers and traveling customers.  

Financial Highlights:

Globe’s consolidated service revenues as of the first six months of 2021 closed at ₱75.5 billion, up 4% from  ₱72.4 billion reported a year ago amid the sustained economic challenges the country is facing. The main  growth driver continues to be data, mostly from @Home Broadband owing to the increase of digital  activities among Filipinos. Total data revenues accounted for 79% of total service revenues from 76% last  year.

Notwithstanding the lingering negative effects of the pandemic on public mobility and the economy, as  Metro Manila and nearby provinces reverted to Enhanced Community Quarantine (ECQ)/Modified ECQ  (MECQ) during the first half of the second quarter, the Mobile business sustained its recovery, growing by 1% year-on-year. Revenue improvement was also fueled by the increased Globe Prepaid top-ups boosted  by the growing popularity of the new digital brand GOMO, given the increased use of data services during  the pandemic. On a sequential basis, mobile revenues was relatively flat versus the first quarter. Total  mobile revenues comprised 70% of the total service revenues, with total mobile subscriber base of 81.7 million, up 2% year-on-year. 

From a product view, mobile data revenues posted ₱38.6 billion for the first half of the year from ₱36.0 billion reported a year ago. Mobile data now accounts for 73% of mobile revenues from 69% in the first  semester of 2020. Given that the health crisis has changed the Filipino lifestyle across work, education,  entertainment, gaming, health, socializing, and purchasing habits, the time spent on mobile applications increased even more. As a result, mobile data traffic climbed to 1,761 petabytes from 1,106 petabytes in  the same period of 2020, which translated to a healthy year-on-year growth of 59%. Meanwhile, mobile  voice and mobile SMS revenues ended at ₱9.1 billion and ₱4.8 billion, lower year-on-year by 11% and  17%, respectively.

Home Broadband business soared to all-time high revenues of ₱14.5 billion, surpassing the same period  last year by 16%, driven by the greater reliance of Filipinos on the internet and the swiftly evolving digital  tools as the COVID-19 situation persists. Total home broadband subscriber base reached 4.2 million,  besting last year’s record by 47% due to higher fixed wireless broadband users, now up by 54% from last  year. On the other hand, wired broadband subscriber base grew a solid 22% versus last year. Likewise,  HPW data traffic steadily increased from 182 petabytes in the same period of 2020 to 423 petabytes this  period. The outstanding performance of Home Broadband was also supported by the sustained volume of  prepaid fixed-wireless broadband modem sales and increasing demand for high-speed postpaid wired  solutions as home internet became a vital requirement for many households.

Corporate Data business revenues for the first six months of the year increased by 8% from ₱6.3 billion as  of end-June 2020, mostly coming from domestic services and information and communication technology  (ICT). Fixed line voice, on the other hand, witnessed a 10% decline from the first half of 2020.

Meanwhile, total operating expenses including subsidy reached ₱38.1 billion as of end-June 2021,  exceeding last year’s operating costs including subsidy by 12% due to the increases across expense line  items except for provisions. The increase in cost and expenses was attributed to higher spending to support  its aggressive network expansion and improve customer digital lifestyle experience.

Total consolidated EBITDA closed the first half of the year at ₱37.4 billion, dropping by 3% from a year  ago due to higher costs and expenses. This also resulted to EBITDA margin decline from 53% a year earlier to only 50% this period. Despite lower EBITDA, net income stood at ₱13.0 billion for the first semester  of 2021 or up 13% from same period of 2020, as the decline in non-operating charges and taxes fully  covered for the increase in depreciation expenses. Lower non-operating expenses this period was mainly due to the significantly lower equity share in Mynt losses, as the company moves closer to profitability,  coupled with the one-time adjustment from investment in Vega related to CREATE Law. Improvement in  NIAT also resulted from the upside impact of CREATE Law.

The Company’s core net income stood at ₱13.2 billion, up by 19% from ₱11.1 billion reported in same  period of 2020. Globe’s core net income excludes the impact of non-recurring charges, and foreign  exchange and mark-to-market charges.

Globe’s balance sheet remained healthy and gearing within bank covenants despite the increase in debt from ₱167.7 billion as of end-December 2020 to ₱185.5 billion this period. Globe’s gross debt to equity  is at 2.09x while gross debt to EBITDA is at 2.65x; Net debt to equity ratio is at 1.93x while net debt to  EBITDA is 2.45x; and debt service coverage ratio is at 2.34x.

Ernest L. Cu, President and CEO of Globe Telecom Inc., commented: 
“We are pleased to report strong financial and operating results for the first half of 2021 with healthy  balance sheet and cash flows despite the re-imposition of stricter lockdowns during the second quarter. In  view of the significant progress in our 5G and fiber rollouts as well as the strengthening of our 4G/LTE  network, we remain on track to help the country achieve a #1stWorldNetwork. Going forward, we will stay  focused on innovation in the areas of fintech, healthcare, education, and e-commerce, among others, to  help Filipinos thrive in this pandemic and best position ourselves for the remainder of 2021 and beyond.”

917Ventures, Globe’s corporate venture incubator, continue to reinvent lifestyle and movement through  different products and services beyond telco to deliver indelible value to consumers and businesses. As the COVID-19 pandemic served as a catalyst for digitalization, Globe succeeded with its mobile wallet GCash,  which is now the largest e-wallet in the Philippines. As of end-June 2021, GCash now has over 43 million  registered users with over 2.5 million merchants and social sellers, and monthly gross transaction value  already breaching ₱200 billion. More importantly, as a testament to GCash’s industry leadership, it reached  a milestone by achieving positive EBITDA and NIAT last June.

Moreover, KonsultaMD and HealthNow lead in the health/medical category for the App Store & Google  Play, as the pandemic propelled the growth of online health services and changed the way Filipinos interact  with medical experts. KonsultaMD App has been posting record highs with consultations skyrocketing  305% versus 2020. KonsultaMD is a healthtech service that allows 24/7 unlimited access to licensed  doctors via voice or video call for as low as ₱60 a month. It is already available in over 25,000 retail outlets  nationwide through ECPay and is available online through Lazada, Shopee, and Kumu. The app also  provides digital management of health consultation records and issuance of medical documents such as e prescriptions, e-laboratory requests, e-referrals and e-medical certificates. Furthermore, in support of the  country’s ongoing vaccination drive, HealthNow houses COVIDShield, the COVID-19 vaccination  program of the Ayala Group and its partners, to fully inoculate about 500,000 employees and their loved  ones, translating into one million COVID-19 vaccinations. The all-in-one healthtech app, which is jointly  owned by Globe’s 917Ventures and AC Health, offers a convenient way to talk to a licensed physician  through video teleconsultation, buy medicines online for delivery, and soon, schedule clinic and diagnostic  appointments.

Recent Developments:

  • The Philippines’ major Mobile Network Operators (MNO) namely Globe, Smart and DITO, are one  with the government in the implementation of the Mobile Number Portability (MNP) Act and through  their joint venture company, Telecommunications Connectivity Inc. (TCI) has successfully concluded  the initial tests of their technical capabilities and interoperability last July 14, 2021. The joint effort  will soon allow customers the option to keep their mobile numbers permanently, even when they  change network providers or switch subscriptions. 
  • Globe has activated and optimized its Voice Over LTE or VoLTE2service and is now available to  postpaid customers in 94 percent of all towns in the country. These developments have made it  possible for more postpaid customers to access the service, improving their voice call experience.  Postpaid customers are encouraged to check if their mobile phone is VoLTE-capable, read about new  VoLTE-ready locations or find what they need to know about VoLTE through these Online FAQs.
  • Globe continues to weave environmental care into its operations, taking measurable steps to combat  climate change. To further encourage Filipinos to properly dispose of electronic waste (e waste), Globe At Home rewards its customers who swap their old Globe Prepaid WiFi devices in  exchange for new LTE-Advanced devices with its “Swap and Save” campaign which coincides with  World Environment Day and the Philippine Environment Month. Customers will receive a 500-peso  discount for Globe MyFi LTE-Advanced and Home Prepaid WiFi LTE-Advanced devices when they  drop-off their existing prepaid Globe MyFi, WiFi stick or Home Prepaid WiFi at any of the 48  participating Globe Stores on or before August 21 this year. To participate in the Globe
  • E-Waste Zero  program, e-waste may be dropped off at over 120 locations such as Globe stores, malls, local  government units as well as premises of partner companies and organizations. Customers may also  avail of the free door-to-door pickup of e-wastes weighing 10KG or more.
  • 917Ventures, the country’s largest corporate venture builder and a wholly owned subsidiary of Globe,  brings external talent and their ideas into the 917Ventures family through its velocity program. A  digital platform for non-techy sellers, an online community for K-culture fans, an IT skills training  program for increased employability are the first three angel ventures that have successfully secured  funding from 917Ventures to bring them closer to their dreams. 917Ventures’s velocity program is a 3-month program that brings external talents into the 917Ventures family to provide them the  opportunity to launch their business ideas. Each venture receives up to ₱2.5M in initial funding. 

Globe’s Business Operations and Commitment to Service Amid COViD-19: 

  • Globe At Home has increased its technician support teams by 80% versus last year to meet customer  expectations for installation, repair, upgrade, or migration service needs especially during this time of  the pandemic that customers do most of their activities at home and depend heavily on the internet.  As an added layer of proactive care, Globe At Home made sure that all of its technicians are carefully  trained to strictly enforce and practice basic safety and health protocols when doing in-home customer  visits and servicing. Also, to be able to immediately meet the needs of its customers, particularly  those in the lower socio-economic classes, Globe At Home offers a shareable plug-and-play Home  Prepaid WiFi for just ₱999 with free 10GB of data. 
  • As a way of extending support to its customers in need, Globe aided over 200 community pantries  nationwide by leveraging on its partnership with PureGold through the PureGo app. Aside from  providing grocery items to feed the hungry, Globe also donated prepaid load cards. To continue  supporting the growing number of community pantries, Globe postpaid customers may also donate  their Rewards points to Walang Iwanan Alliance to fund the purchase of supplies in support of the  community pantries. Globe prepaid and TM customers who have Rewards points may support via  the Globe Rewards app. Just click “Donate” and choose Walang Iwanan Alliance. Each point is  equivalent to ₱1. 
  • As the country ramps up efforts to overcome the global health crisis, Globe seals its partnership with  Antipolo to power up its local government and select medical facilities with Free GoWiFi and  Automated Mobile Blaster (AMBER) services. This partnership enables Antipolo LGU’s personnel,  and more importantly, its residents to stay connected with safe, secure, and reliable WiFi connectivity  as they perform day-to-day obligations, as well as stay connected and informed with the LGU’s  activities and movements.  

Similarly, Globe has joined hands with Mandaluyong City in keeping almost 470,000 residents safe,  informed, and connected during the pandemic via its Free GoWiFi and AMBER services. Globe  powers up Mandaluyong City Hall and Mandaluyong City Medical Center as part of a broader plan to  elevate the availability of accessible internet in the country and improve COVID-19 vaccination  coverage via SMS. 

For recent updates on how Globe is responding to COVID-19, the general public may access the Globe  website via this link: and the Globe #StayAtHome page via this link: 

Globe Announces 2nd Quarter & First Half 2021 Results Globe Announces 2nd Quarter & First Half 2021 Results Reviewed by Mᴇɢᴀᴘʜᴏɴᴇ Pʜɪʟɪᴘᴘɪɴᴇs on August 07, 2021 Rating: 5

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