Globe reduces capex spending by 22% in Q1 2024

Globe Telecom has optimized its capital expenditure (capex) strategy, investing Php 13.7 billion in the first quarter of 2024.

The move marks a notable 22% decrease from the same period last year, aligning with the company’s goal of enhancing capital efficiency.

The first quarter investment, representing 33% of Globe’s total service revenues, is a significant reduction from the 44% recorded in 2023. This reduction underscores Globe’s commitment to maintaining growth and delivering enhanced digital experiences to Filipinos while optimizing capital deployment.

“Our recalibrated capex strategy focuses on optimizing future investments to support the growing data requirements of our customers while ensuring we are on track to achieve our goal of being free cash flow positive by 2025,” said Rizza Maniego-Eala, Globe’s Chief Finance Officer.

Approximately 91% of Globe’s Q1 capex was allocated to data network expansion and enhancements. These investments aim to ensure seamless digital experiences for customers, with a primary focus on the mobile network. Notably, Globe has shifted its fiber strategy from aggressive rollout and expansion to optimizing port utilization.

For the entire year of 2024, Globe has set a capex guidance of $1 billion, a reduction from previous years. The company projects further reduction of capex to below $1 billion by 2025. Globe’s capex-to-revenue ratio has significantly decreased from 64% in 2022 to 44% in 2023, reflecting its strong commitment to capital efficiency.

The 2024 capex is financed through a mix of operating cash flow, asset sales, and a measured level of debt financing, ensuring the strategic deployment of resources.

This strategic capex approach enables Globe to invest in data network enhancements, maintain capital efficiency, and uphold its market leadership. The company continues to deliver innovative digital solutions to its customers across the Philippines.