Gross service revenues slipped 3 percent to P39.9 billion, mainly due to weaker mobile and broadband income amid tighter consumer spending.
This was reflected in the 3 percent drop in mobile revenues, a major contributor to Globe’s topline, which fell to P28.3 billion even as the subscriber base grew to 61.6 million. Mobile data earnings were relatively flat at 1 percent growth while traffic during the quarter shed 5 percent.
“Sustained high consumer prices continued to strain household budgets, potentially reducing discretionary spending on mobile data,” Globe said.
It added that limited mobility from class and work suspensions due to extreme heat and a transport strike also contributed to the decline.
Management’s view
“Notwithstanding our first-quarter results, we remain steadfast in driving our strategic agenda forward and unlocking greater operational efficiency across the business,” Carl Raymond R. Cruz, Globe’s newly appointed president and CEO, said in a statement.
GCash doubles contributions
A bright spot was Globe’s stake in Mynt, the operator of GCash, which delivered P1.8 billion in equity earnings, up 86 percent from a year earlier.
Mynt now contributes 22 percent of Globe’s pre-tax profits, up from just 11 percent last year, while a P2.6 billion one-time gain from MUFG’s 8 percent investment in Mynt gave overall earnings a boost.
Strong profit margin
Globe also kept a tight lid on costs, lowering operating expenses by 4 percent to P19.1 billion.
This helped protect margins and ended the quarter with a solid 52.1 percent earnings before interest, taxes, depreciation, and amortization margin.
Prepaid fiber
Broadband revenues dropped 5 percent to P5.8 billion, but the shift to fiber services accelerated, with prepaid fiber brand GFiber Prepaid growing its user base 53 percent in just one quarter to 400,000.
“While acknowledging the maturity of the telecommunications industry, we are particularly encouraged by the opportunities for growth in other significant verticals, notably the enterprise sector and the strong growth momentum of our GFiber Prepaid, all while maintaining our position as the number one mobile network in the Philippines,” Cruz said.
