Globe Telecom Inc. expects to generate more proceeds from its tower sale and leaseback initiatives this year, with the balance of the towers to be turned over progressively over the next few quarters.
Last August, Globe decided to sell more than 7,000 towers for over P91 billion to MIESCOR Infrastructure Development Corp., Frontier Tower Associates Philippines, and PhilTower Consortium Inc. to improve its balance sheet health and finance its capital expenditures (capex).
Of the total proceeds, Globe raised around P39 billion from the transactions.
To strengthen free cash flow generation starting this year, Globe is committing to a lower capex level of $1.3 billion in 2023 and aims to further reduce this to $1 billion in 2024.
Globe said this optimization of capital spending and improvement in free cash flow will not be at the expense of service quality as the company will continue with its commitment to deliver a world-class network and an industry-leading customer experience.
In terms of revenues, Globe reiterated its expected mid-single digit growth in overall service revenues versus the record level of 2022.
Likewise, the company is focusing its efforts on free cash flow sustainability by slowing down on capital spending and optimizing network utilization, as it makes the most out of network investments made in the last three years.
Rizza Maniego-Eala, Globe chief finance officer, said the company is also looking at maintaining its 50 percent margin for earnings before interest, taxes, depreciation and amortization (EBITDA) this year.
“We have a guidance of revenue growth of mid-single digit in 2023. It is the same guidance that we had in 2022, despite the major macroeconomic headwinds we are facing this year. We likewise gave guidance of maintaining our 50 percent EBITDA margin, which we will deliver by following through on our cost management initiatives,” she said.
Globe’s EBITDA inched up by six percent to an all-time high of P79.1 billion last year from P74.9 billion in 2021, with an EBITDA margin of 50 percent from 49 percent in 2021.
The company also booked a four percent rise in service revenues to a record high of P158 billion in 2022 from P152.3 billion in 2021, driven by mobile and corporate data services and increased revenue contribution of non-telco subsidiaries.
Globe’s revenues in the fourth quarter surpassed the P40 billion level for the first time in the company’s history.
On the bottom line, the company reported a 46 percent jump in net income, to end the year at P34.6 billion from P23.7 billion in 2021.
Globe said the increase was brought about by the gains it recognized for the partial sale of its data center business, as well as the execution of the first few tranches of the sale and leaseback of its tower assets.
