050707: Globe's profit sags on debt payment

By Lenie Lectura

Reporter

GLOBE Telecom Inc.’s net profit declined 25 percent to P2.6 billion in the first quarter of the year, owing to the prepayment of a $300-million bond it made last month. The country’s second largest phone firm reported over the weekend that it absorbed P1.2-billion non-recurring, after-tax impact of the early redemption of its bonds originally due in 2012. The cellular firm’s core profit, which strips out currency and derivative gains, reached P3.7 billion. Globe, which is jointly owned by Ayala Corp. and Singapore Telecommunications (SingTel), closed the first quarter with a cellular subscriber base of 17 million. It added 1.3 million new subscribers during the first three months of the year from 15.7 million at end-2006. All the numbers have been rounded out. The company’s postpaid and prepaid subscriptions grew 49 percent year-on-year, with Touch Mobile continuing to top its income base. Revenues rose 10 percent to P15.6 billion as it recorded 11 percent and three percent growth from the wireless and wireline segments, respectively. Earnings before interest, taxes, depreciation, and amortization jumped to a record P10.4 billion. “We will work hard to sustain this strong start into the rest of the year, by continuing to focus on improving operational efficiencies and on enhancing our customers’ experience,” said Gerardo C. Ablaza Jr., president and chief executive officer. The company spent P3.1 billion in capital expenditures January to March as part of its programmed spending of P17 billion this year. Globe spent P14.8 billion in 2006. The company is also investing in back-end facilities to support its broadband thrusts and meet the growing demand for international bandwidth. Globe will be participating in a new cable project spearheaded by VSNL International, a member of the Tata Group of India, which will set up a trans-Asian submarine cable system that will link the Philippines to Hong Kong and Singapore, with connectivity via the TGN Pacific network to Japan, Guam and the United States. Globe will be the exclusive landing party in the Philippines to this cable system, which is expected to be completed by the second half of 2008. Total estimated cost to Globe is about $90 million, including the costs of capacity within Asia and the US, a new landing station and domestic backhaul. “We remain excited about broadband and all the possibilities that it brings to our nation,” Ablaza said. “We intend to be at the forefront of this opportunity and look forward to delivering on our mission to bring the Internet to every Filipino home, classroom and business.”

 

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