Globe nets P11.3 B in 2004, up 9.7%

With subscriber take-up still going strong in 2004, Globe Telecom Inc. earned P11.3 billion net profit last year, 9.7 percent higher from last year’s P10.3 billion on P52.7 billion revenues.

It reported an 18 percent drop in net profit in the fourth quarter of 2004 due to tough competition in the mobile market.

Globe’s total wireless subscriber base shot up by 41 percent to 12.5 million as of end-2004. Quarterly gross additions totaled 2.8 million while net subscriber additions totaled 0.8 million in the fourth quarter.

“We will continue our aggressive expansion program with P17 billion earmarked to build even more cell sites that will enable Globe to continue growing its revenue and income base in the coming years,” announced Globe Chairman Jaime Augusto Zobel de Ayala II.

Obviously, the telephone company’s mass market thrust has paid off. “Despite the challenges in 2004, Globe has strengthened its position in the mass market arena as we aggressively served the provincial markets, in line with the continued growth momentum of the wireless industry,” confirmed Gerardo C. Ablaza, Jr., President and CEO.

Globe’s service revenues increased by 11 percent from 2003 while operating costs and expenses grew by only 4 percent to P22.6 billion.

As a result, earnings before interest, taxes, depreciation and amortization (EBITDA) rose to R33.0 billion while EBITDA margin improved to 63 percent from 59 percent the previous year.

“We have laid the platform for future growth by introducing breakthrough innovations in the areas of value-transfer and m-commerce, and aggressively expanding our network into the provincial areas,” Ablaza pointed out.

For 2005, “We will proactively seek and explore new opportunities that lie ahead and strive to keep our tradition of breaking new ground in the mobile experience through the conceptualization and creation of further innovative services,” he declared.

Consistent with Globe’s dividend policy, the Board of Directors declared the first semi-annual cash dividend of R20 per share payable to common stockholders of record as of February 18, 2005. This represents an increase of 11 percent over last year’s first semi-annual cash dividend.

Globe will pay a total of P2.8 billion dividends on March 15, 2005.

Globe’s Board of Directors also approved an offer to purchase one share for every fifteen shares of the outstanding common stock of Globe, from all shareholders of record as of February 10, 2005, at a price of R950 per share.

The approval allows Globe to purchase up to 9,326,924 shares representing 6.67 percent of the company’s outstanding common shares. Each shareholder is entitled to tender a proportionate number of shares at the 1:15 ratio for purchase by Globe upon and subject to the terms and conditions of the tender offer.

Assuming all shareholders participate in the tender offer to the full extent, the total purchase price will be about P8.86 billion.

“Our intent to buyback Globe shares is also in line with our desire to return value back to shareholders,” Ayala explained. “The dividend policy and the share purchase transaction signal our confidence in the company’s business fundamentals and positive outlook for the long-term.”