February 10, 2022 | 8:00 a.m.
The Ayala family’s telephone company released a teaser of its annual financial report yesterday.
The title was about Worldit is [GLO 3032.00 0.72%] record capital spending last year (over 92 billion pesos), and what he calls the “sustained financial recovery in the second half of 2021”.
GLO’s consolidated service revenue reached 151.5 billion pesos, up 4% from its COVID-crippled 2020 and 2% from its pre-pandemic level in 2019.
Net profit was 23.7 billion pesos, up 27% from 2020, but GLO notes that its 2021 net profit, once normalized to remove one-time items such as Odette-related costs, or its gain deemed sale on Mynt shares, or the effects of the CREATE Act, was actually 19.4 billion pesos.
This is 15% less than in 2020.
If filtered to “exclude the impact of non-recurring charges and foreign exchange and mark-to-market charges”, GLO’s base net income was 21.2 billion pesos, an increase of 9% from compared to 2020.
The number of subscribers increased to 86.7 million (up 13% compared to 2020), post-paid ARPU (average revenue per user) fell 3% and prepaid ARPU increased by 7 .8%.
These teasers are a great way to get a very high-level idea of the full set of data that would be contained in the actual annual report, but they simply don’t replace the information that can be gleaned from the full picture.
They are good for reducing the shock and uncertainty of the actual report, but I hate drawing conclusions from hand-picked statistics based on reports that are not yet publicly available.
It was very interesting to see GLO prioritize network capital expenditures, network utilization metrics, and network performance metrics like it did. The headlines were: (1) record capex in 2021, (2) lots of capex in 2022, (3) network speed keeps improving, (4) financial results.
The teaser body followed the same progression. This may be partly marketing, but it may also reflect an internal focus on spending and performance in the face of a tough newcomer like Dito Telecommunity [DITO 6.20 6.35%]which recently made headlines when it boasted that it had doubled its planned capital expenditure for 2022 to 50 billion pesos.
Here, GLO makes sure we all see how it spent nearly double that amount last year and plans to spend almost 80% more than DITO’s projected capital expenditure for 2022. .
Talking about 5G network rollout has been a major part of DITO’s marketing in recent months, so it was also telling that the first sentence of the section following the discussion of capital expenditure talks about GLO’s 5G network rollout across 1,407 new 4G/5G Towers, 22,300 upgraded mobile sites and 2,000 outdoor/indoor 5G sites.
I look forward to reading the full report and starting the “Telecommunications Dashboard” to measure subscribers, profitability and 5G deployment between GLO, CLEVER [TEL 1934.00 2.60%]and DITO.