One-time gain, lower taxes boost Globe's 2009 income
MANILA, Philippines - Ayala-led Globe Telecom Inc. reported an 11% rise in profits last year on the back of non-recurring gains and lower taxes.
In a statement released Thursday, the country's second-largest telecommunications firm said its net income reached P12.6 billion in 2009 from the P11.3 billion recorded in the previous year.
While Globe's consolidated service revenues dropped 1% to P62.4 billion, the company posted an after-tax gain of P398-million from an equipment change transaction with a supplier during the first half of 2009, and a lower tax rate of 30% from 35% in 2008.
Excluding foreign and mark-to-market gains and losses, and non-recurring items, Globe Telecom's core net income grew 2% to P12 billion last year.
"Despite the difficult year, Globe continued to deliver solid growth. As we set forth on our path to acquiring quality subscribers and focusing on delivery of premium customer experience in 2009, we are now in a better position to push further the gains in our broadband and corporate fixed line data businesses, while driving growth in our mobile business," Globe Telecom president and chief executive officer Ernest Cu said.
Globe Telecom ended the year with 23.2 million mobile subscribers, 6% lower than the 24.6 million recorded in 2008. The company said it continued to churn out marginal subscribers and focused on acquiring better-quality mobile phone users. (Read: Getting to know the 'sophisticated' prepaid user)
Early last year, Globe Telecom shifted its strategy from aggressive subscriber acquisition, which was the case for many years, to stimulating usage and strengthening brand loyalty. (Read: Globe Telecom: Quality over quantity)
Meanwhile, capital expenditures amounted to P24.7 billion last year, a 21% increase from the 2008 level of P20.4 billion.
Globe Telecom said the amount was used for the company's participation in the TGN-IA international cable system, its second fiber-optic backbone network, domestic transmission loops, and upgrades of its broadband and mobile networks.
This year, the Ayala-led firm is allocating $500 million in capital expenditures to be spent on its mobile, broadband, and fixed line networks.