Globe Telecom profit jumps 37% on subscriber growth

INQ7 MONEY - BREAKING NEWS

August 01, 2006
Updated 10:07:21 (Mla time)

Xinhua Financial News Service

GLOBE Telecom Inc. said its first-half net profit rose 37 percent after subscribers to its mobile phone service grew and costs dropped.

The Philippines' second largest telecoms firm reported net income of 5.8 billion pesos in the six months ended June, up from 4.21 billion in the same period last year as consolidated net service revenue grew 6 percent to 28.5 billion pesos.

First-half earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of profitability, was up 23 percent at 18.9 billion pesos while operating expenses declined 11 percent.

"Sustained improvements in revenues combined with effective cost management efforts fueled a 37 percent growth in income this year compared to the same period in 2005," Globe said in a statement.

Globe did not provide second-quarter figures but based on the 3.5 billion pesos profit it reported in the three months to March, net income in April-June was about 2.3 billion pesos, up from 1.19 billion in the same period a year ago.

The company, which counts Singapore Telecommunications Ltd. and Ayala Corp. as major shareholders, said it added 1.5 million new subscribers in the first half to bring its total client base to 13.9 million at end-June. In the second quarter alone, 700,000 new clients signed up.

"Our strong finish to the first half of the year is a reflection of increasing competitiveness resulting from the effective execution of key growth initiatives started in the second half of 2005," Globe president and chief executive officer Gerardo Ablaza Jr. said.

"Recognizing the challenging times ahead, we will continue to focus on the fundamentals for strong sustainable growth, and to pursue continued cost and efficiency improvements for Globe."

At the end of June, Globe said it has 5,500 cellular sites with 2G capacity, and is on track to install 1,000 3G-capable sites by yearend.

Following its half-year results, the company declared a semi-annual cash dividend of 30 pesos per share to shareholders on record as of August 17, payable on September 12.

Globe said its board of directors has increased the firm's dividend payout ratio to 75 percent of prior year's net profit from 50 percent previously.

(One dollar = 51.48 pesos)

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