Globe Telecom cautions of Q2 revenue hit

Philippines-based operator Globe Telecom warned measures to control the Covid-19 (coronavirus) outbreak, while having a minor impact on Q1 results, would lead to a double-digit decline in revenue in the current period.

Ernest Cu, president and CEO, said he was pleased the company posted healthy results in the first quarter despite the nation entering an enhanced community quarantine in the last two weeks of March.

“While we are grateful for our recent achievement, we understand that this is not reflective of our performance moving forward. In light of this extraordinary environment, we expect revenues in the next quarter to decline by low double digits from the first quarter levels.”

Cu noted an acceleration in home broadband services, and cloud-based and cybersecurity services given the move for employees at many companies to work remotely.

Consolidated net income declined 2 percent year-on-year to PHP6.6 billion ($130.6 million) in Q1, while operating service revenue rose 1 percent to PHP41.2 billion.

Strong data growth

Mobile revenue was flat at PHP26.8 billion due to lower prepaid top-ups and post-paid acquisitions. Mobile data revenue increased 12.1 percent to PHP18.5 billion, accounting for 69 percent of mobile turnover, up from 61 percent in Q1 2019.

Mobile voice revenue fell 15 percent to PHP5.29 billion, while SMS dropped 28 percent to PHP3.03 billion.

The operator’s mobile subscriber base increased 7 percent to 89.3 million, with the majority of the growth from prepaid. ARPU for prepaid declined 20 percent to PHP91, with post-paid down 3 percent to PHP858.

Average monthly data usage jumped 37 percent to 4.8GB.

Capex grew 22 percent to PHP10.7 billion: the company expects the figure to be at least PHP2 billion lower in the current quarter.

And it reduced its quarterly dividend to conserve cash for operations.

―Mobile World Live