DESPITE the lingering effect of the pandemic on the economy, Globe Telecom Inc. hopes to overturn last year’s decline in revenues to post a “modest” single-digit growth this year, as it ramps up its network development program.
Globe CFO Rizza Maniego-Eala said the company hopes to tread on a more favorable growth path this year, despite posting a 2-percent decline in revenues last year due to the Covid-19 pandemic.
“Revenues will grow in the low single digit for 2021,” she said.
The Ayala-led telco, she said, is investing P70 billion in capital expenditures (capex) this year, higher than the P60.3-billion capex spent in 2020 to further modernize its mobile and fixed line networks.
“We will fund it with cash from operations and borrow some debt for 2021,” she said. “We do have some borrowing planned for this year. We will monitor it depending on cash inflows.”
Globe, as of end-2020, has a cash balance of P90.5 billion.
Ernest L. Cu, the company’s president, noted that the record capex will help drive the single-digit revenue growth target for 2021, as it seeks to gain more customers on the back of the demand for home broadband this year.
“We remain optimistic that our strategy to focus on fulfilling the needs of our customers, backed by our resilient and improved network, will drive our performance moving forward,” he said.
Globe reported on Wednesday that it booked a net income of P18.62 billion in 2020, a 16-percent drop from P22.28 billion the year prior, as its revenues dipped by 2 percent to P146.38 billion, from P149.01 billion while posting flattish operating expenses at P72.87 billion.
Its core net income likewise plunged by 13 percent to P19.52 billion from P22.45 billion during the same comparative periods.
On a normalized basis, which removes the effects of seasonality, one-time influences, and unusual revenue and expenses, Globe booked a net income of P20.44 billion, still an 8-percent decline from the P22.28 billion it booked the year prior.
“2020 was a challenging year for Globe but we pulled through despite the Covid-19 pandemic and adverse economic environment. Our prudent financial management in these turbulent times allowed us to maintain strong cash flows, giving us the flexibility to continue to invest back into our network,” Cu said.
He noted that as an industry, the telecom sector will likely grow this year so long as the economy continues to open up despite the rigid demands of the pandemic.
“The industry will continue to grow as long as we don’t have the severe lockdowns that we had,” Cu said.
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