Globe says 2025 capex may fall below $1 billion

AYALA-LED Globe Telecom, Inc. may further reduce its capital expenditure (capex) next year, signaling a shift in its investment strategy.

This year’s capex stands at $1 billion, but the company may lower this figure to below $1 billion for the next fiscal year, Globe Chief Financial Officer, Treasurer, and Chief Risk Officer Juan Carlo C. Puno said during a virtual briefing on Monday.

“In terms of capex, we are still finalizing plans. We have gone to the market the past few quarters with the signal of dropping cash capex to below $1 billion,” he said.

He said next year’s capex budget will be mainly funded by internally generated funds and debt.

For this year, Globe cut its capex by 22%, bringing it down to P55 billion from P70.6 billion in 2023, as part of its strategy to achieve positive cash flow by 2025.

“One thing to consider is we still have P11 billion of proceeds from the tower sale that we have yet to collect. Assuming we are able to get that, it will complement the fundraising for 2025,” Mr. Puno said.

To recall, Globe said in July that it had generated P85.2 billion from its tower sales after fully transferring some of its tower assets to Frontier Tower Associates Philippines, Inc. (Frontier Towers).

Globe also has other ongoing tower sales. In October, the company completed the sale of 25 telecommunications towers to Unity Digital Infrastructure, Inc. for P300 million.

This development marks the latest transaction of Globe’s tower sales to Unity, representing 68.7%, or 307 of the 447 towers to be acquired by Unity for a total of P5.4 billion.

Further, Mr. Puno said the company is confident it will hit its revenue growth target of mid-single-digit growth by the end of the year.

For the third quarter, Globe’s attributable net income climbed by 21.1% to P6.02 billion from P4.97 billion in the same period a year ago, driven by higher revenues during the period.

The company’s August-to-September revenue rose to P45.12 billion, marking a 1.9% increase from last year’s P44.27 billion, its financial statement showed.

For the nine-month period, Globe’s attributable net income went up to P20.58 billion, higher by 6.7% from the P19.29 billion earnings in the comparable period last year.

Gross revenues for the January-to-September period were flat, increasing by 0.7% to P134.74 billion from P133.79 billion in the same period last year.

At the local bourse on Monday, shares in the company closed P46, or 2.11%, lower to end at P2,134 apiece. — Ashley Erika O. Jose