Despite a more challenging fourth quarter due to inflationary pressures and weaker consumer spending caused by multiple typhoons, the company sees early signs of recovery, with January 2025 performance already improving, Globe president and CEO Ernest Cu said during a briefing on Friday.
“The fourth quarter was more challenging than usual, partly due to inflationary effects from previous years that affected the spending power of Filipinos,” Cu said.
“There were a series of typhoons that affected the country and further reduced their spending capacity,” he added.
Competition
Globe is also facing heightened competition from industry players such as SMART and DITO Telecommunity, which is steadily gaining market share.
“We anticipate…the temporary heightening of competition in the fourth quarter will have abated by the time [we’ve concluded] the first quarter of 2025. This is considering how we saw that the results in January are already picking up nicely,” Cu said.
As a result, Globe announced margins “will be affected by the growing share of lower-margin data-related products, but cost management efforts will mitigate this impact.”
Globe sees stable 2025 Ebitda, disciplined spending
In a stock exchange filing on Friday, Globe said earnings before interest, taxes, depreciation, and amortization (ebitda) margins will stay in the low 50 percent range, with cost controls helping offset profitability challenges.
Moreover, capital expenditures will drop below $1 billion, as it shifts to a more disciplined investment approach.
These moves, in turn, will bolster free cash flow, which represents the cash a company has left after covering operating costs and capital expenditures.
This is an indicator of its ability to bankroll expansion, pay down debt, or return dividends to stockholders.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
