Globe continues to refine its capital expenditure (capex) strategy, investing Php 13.7 billion in the first quarter of 2024, a significant 22% reduction from the same period last year. This expenditure aligns with the company’s reiterated guidance of reduced capex following the peak levels achieved in 2022.
The investment in the first quarter equates to 33% of Globe’s total service revenues for the quarter, markedly lower than the 44% recorded in 2023. This underscores Globe’s focus on capital efficiency while ensuring continuous growth and improved digital experiences for Filipinos.
Rizza Maniego-Eala, Globe’s Chief Finance Officer, stated, “Our redefined capex strategy concentrates on optimizing future investments to cater to our customers’ increasing data needs while ensuring we are on the path to becoming free cash flow positive by 2025.”
Approximately 91% of the capex in the first quarter was allocated for data network expansion and enhancements, ensuring that Globe customers can enjoy seamless digital experiences at any time and place. These investments were primarily directed towards Globe’s mobile network as the company transitioned its fiber strategy from rollout and expansion to optimizing port utilization.
For the full year 2024, Globe has set a capex guidance of $1 billion, lower than in previous years, with plans to further reduce spending to below $1 billion by 2025. The company’s capex-to-revenue ratio has significantly decreased, from 64% in 2022 to 44% in 2023, reflecting its commitment to capital efficiency.
This year’s capex is funded through a mix of operating cash flow, proceeds from asset sales, and a controlled level of debt financing.
Globe’s capex strategy allows the company to strategically invest in data network enhancements, ensure capital efficiency, and maintain its market dominance while delivering innovative digital solutions to its customers across the Philippines.
FAQs
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What is Globe’s capex strategy? Globe’s capex strategy focuses on optimizing future investments to support the growing data requirements of its customers. The company aims to be free cash flow positive by 2025.
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How much was Globe’s capex in the first quarter of 2024? Globe invested Php 13.7 billion in the first quarter of 2024, a 22% decrease from the same period last year.
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What is the focus of Globe’s investments? Approximately 91% of the capex in the first quarter was allocated for data network expansion and enhancements.
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What is Globe’s capex guidance for the full year 2024? For the full year 2024, Globe has set a capex guidance of $1 billion, with plans to further reduce spending to below $1 billion by 2025.