Globe Group Hit a Solid Performance for FY 2023, With Revenues at PHP 162.3B, Up 3%, and EBITDA at PHP 81.4B, Up 3%

The Globe Group finished 2023 with a new all-time high in consolidated service revenues of P162.3 billion, 3% more than the previous year's record of P158.0 billion.

This was mainly driven by the exceptional contribution from mobile, corporate data, and non-telco services. Boosted by the company’s data-centric offerings, Globe’s total data revenues as a percentage of total consolidated service revenues increased to 83% from 81% last year, with the digital lifestyle becoming an integral part of Filipino life. Also, the company’s non-telco revenues posted an 18% yearly growth and now accounts for 3% of total consolidated service revenues from 2.6% last year. This result was achieved notwithstanding the deconsolidation of ECPay from Globe’s books (with the sale of its 77% stake in ECPay to Mynt last September 2023). On a comparable basis, if we adjust the prior period assuming the deconsolidation of ECPay, Globe’s total gross service revenues still would have grown by 3% year-on-year and quarter-on-quarter.

​The mobile business continued to perform significantly, completing the year with a historic high of P112.4 billion, up from the previous record of P107.5 billion set in 2022. The substantial 5% year-on-year increase was mostly driven by prepaid and pent-up demand for low-cost mobile devices, as well as increased time spent on high-bandwidth online video services and social networking content via smartphones. Total mobile revenues accounted for 69% of total service revenues, with the total mobile user base ending (post-sim registration) at 57.0 million in 2023.

Mobile data revenues rose to P90.9 billion for the full year of 2023, up a strong 9% from the previous year's high of P83.8 billion. Mobile data traffic climbed to 5,960 petabytes at the end of December 2023, surpassing the 4,658 petabytes reported a year earlier. Mobile data currently accounts for 81% of overall mobile revenue, up from 78% the previous year. In contrast, mobile voice and SMS revenues ended 2023 at P13.5 billion and P8.0 billion, respectively, down 9% and 10% year on year.

Globe's corporate data revenues were P18.3 billion, or 7% more than the previous year, the biggest in the company's history, as its information and communication technology (ICT) solutions and services continued to grow at a 14% annual rate. This persistent growth trajectory demonstrates Globe's strong commitment to leading the digital transformation of enterprises across the country.

In contrast, Home Broadband revenues fell 7% compared to P27.1 billion in 2022, owing primarily to a decline in fixed wireless, but were partially offset by positive growth in postpaid fiber. Postpaid fiber subscribers and revenues increased by 1% and 14%, respectively, throughout the course of the year. Meanwhile, fixed wireless access revenues and operating indicators continued to stabilize. Consistent with the company's guidance, the quarterly decline in fixed wireless subscribers is slowing, and the downward pressure from this segment is expected to ease by 2024.
 
Total Home Broadband subscriber count is now 1.8 million (after SIM registration), a 32% decrease year on year, with HPW data traffic falling to 289 petabytes by the end of December 2023 from 450 petabytes the previous year.

Furthermore, as the Globe Group continues to deliver life-changing innovations to solve Filipinos' everyday pain points through an unparalleled ecosystem of products and services in financial technology, virtual healthcare, e-commerce, business outsourcing, edutech, and media and entertainment, Globe's non-telco revenues increased to P4.9 billion in 2023 from P4.2 billion the previous year.

Meanwhile, total operating expenses, including subsidies, were P80.9 billion in 2023, up 3% from the previous year. 2023 will continue to be a hard year, with persistent macroeconomic and external issues pushing practically all expense line items to rise. These increases were somewhat offset by savings from marketing and subsidies, as well as staff costs, as a result of the company's cost management activities.
 
Consolidated EBITDA was a record P81.4 billion, up 3% from 2022, with the topline expansion overcoming the increase in operational expenses (including subsidies). This enabled the overall EBITDA margin to hover around 50%, which is largely consistent with the company's full-year projection.
 
However, this period's EBITDA growth was offset by a 4% increase in depreciation costs and this year's non-operating charges, resulting in a 29% decrease in net income to P24.6 billion from P34.6 billion last year. The total non-operating income of P10.7 billion recorded in 2022 includes a one-time net gain of P8.5 billion (post-tax) from the partial sale of Globe's data center business. Excluding these one-time gains, normalized net income would have been P19.1 billion, down 4% year on year.

​Mynt's continuous upward trajectory, as GCash grows globally to empower more Filipinos here and abroad with digital financial tools and services, has helped the Globe Group's bottom line.

The Globe Group's portion of Mynt's equity earnings was P2.4 billion, accounting for 7% of this year's net income before tax. Mynt's equity earnings increased by an astonishing 193% in 2022.

As a result, core net income, which excludes the impact of non-recurring charges, foreign exchange, and mark-to-market costs, finished at P18.9 billion for the period, compared to P19.2 billion achieved in 2022. Similarly, normalized core net income was 1% lower than last year.

Despite an increase in debt from P233.2 billion in 2022 to P250.0 billion in 2023, the balance sheet remained solid and comfortably within bank covenants as a result of many efforts implemented by the company. Globe's gross debt to EBITDA ratio is 2.75x, net debt to EBITDA is 2.57x, and the debt service coverage ratio is 2.18x.

“Globe reached new heights in 2023 despite the lingering macroeconomic challenges and competition we faced. We continue to reinforce our position as a leading innovator in the country, with Mynt's GCash continued success expanding its digital services for Filipinos globally; STT GDC's aggressive data center expansion projects; and Gogoro Philippines' launch of electric mobility and battery-swapping technology in Metro Manila. Our non-telco businesses contributed more this year whether on the revenue line or in the equity earnings line, fueling our momentum going into the new year. As we move forward to 2024, we are very optimistic that we will achieve continued growth by executing well on our customer-focused strategy and enhancing innovations using digital solutions backed by our firm commitment to network excellence. We will push the boundaries of what's possible in the telecom industry to create greater value for our customers, stakeholders, and the broader digital ecosystem.” Ernest L. Cu, President and CEO of Globe Telecom Inc., stated.
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​In accordance with the company's commitment to a sustainable dividend policy, the Globe Board of Directors approved an increase in the dividend distribution range to 60–90% (from 60% to 75%) of the prior year's core net income. The updated policy will provide Globe greater flexibility in declaring future dividends that are consistent with the expected increases in profits and cash flow generation as a result of the company's reduced capital spending. Furthermore, a larger payout range allows the company to maximize value for its shareholders in the future and improves Globe's dividend payout competitiveness in comparison to its regional counterparts.