Press Release 3Q 2018 1

GLOBE ANNOUNCES 3RD QUARTER 2018 RESULTS

GLOBE INVESTS P32.5 BILLION IN CAPEX WITH MAJORITY FOR ITS NETWORK,

REPRESENTING NEARLY 32% OF GROSS SERVICE REVENUES

As LTE Service Nears 95% Nationwide Coverage

MOBILE SUBSCRIBERS AT 65.4 MILLION, UP 10% YoY;

BROADBAND SUBSCRIBERS NOW OVER 1.5 MILLION, UP 23% YoY

For the first nine months of 2018, Globe invested around P32.5 billion or $618 million in capital

expenditures to support the growing subscriber base and address its rapidly changing and rising demand for

data. This massive investment amounts to nearly 32% of topline revenues, among the highest in the region,

as the company continues to reinvest in its network to continue improving quality and experience of its

subscibers. About 78% of the total expenditures for this period was for data-related services. With its

capital expenditures plan, Globe not only remains on course to fulfill its commitment of deploying LTE

services to 95 percent of cities and municipalities nationwide by the end of 2018 but also allows for

upgrading its network to support the pilot 5G deployment in 2019. To date, Globe has a total of 40,522

base stations, with close to 27,000 for 4G to support the service requirements of its customers.

Total customer base grew by 10% against last year, with growth coming from both mobile and the home

broadband front. Globe’s mobile subscriber base totaled 65.4 million as of end September 2018, up 10%

from the 59.3 million subscribers reported in the same period last year. This increase led to mobile data

traffic growing by 49% from 430 petabytes last year to 641 petabytes this period. Complementing the

growth in mobile, total home broadband subscriber base grew around 23% and now stands at over 1.5

million, of which around 48% are home wireless subscribers. Gains on the broadband business allow Globe

to capture more home broadband usage, in line with the company’s bid to roll out ultra-fast internet service

to 2 million homes by 2020.

On a post-PFRS basis, Globe closed the first nine months of 2018 with consolidated service revenues of

P101.9 billion, with the third quarter revenues increasing to P34.6 billion or up 2% from prior quarter.

Excluding the impact of the PFRS 15 adjustments, total consolidated service revenues as of end-September

this year was P103.3 billion, or 9% increase year-on-year. The sustained growth momentum was fueled by

better-than-expected data-related revenue growth acrosss all business segments. This performance was

boosted by the most pervasive 4G/LTE network, supported by the Company’s superior content offerings,

through its partnerships with industry leaders and global content providers of music, lifestyle, video and

eSports. Please note that all post-PFRS numbers quoted are only estimates and will be finalized once

Globe’s automation efforts on the adoption of the new accounting standards are completed.

Mobile revenues for the period grew to P77.7 billion on a post-PFRS basis, while pre-PFRS revenues

registered at P79.1 billion for the same period, up 8% from a year ago. From a product perspective, mobile

data revenues amounted to P38.7 billion for the first nine months of the year, with tailwinds from increasing

consumer spending on mobile data, and sustained growth in mobile data traffic. Mobile data continued to

be the top contributor to the Company’s total mobile business, and now accounts for 50% of gross service

revenues from 43% a year ago. Mobile SMS and mobile voice revenues for the period ended at P16.3

billion and P22.7 billion, respectively. Excluding the impact of the PFRS 15 adjustments, mobile data,

mobile SMS and mobile voice revenues stood at P39.5 billion, P16.6 billion and P23.1 billion, respectively.

Press Release 3Q 2018 2

Globe’s home broadband business showed a 9% increase versus the second quarter and brings year-to-date

revenues to P13.5 billion (post-PFRS), attributed mostly to subscriber expansion in fixed wireless solutions,

supported by the affordable, flexible home broadband bundles and plans thats’s best suited for the budget-

conscious family. On a pre-PFRS basis, home broadband revenues stood at P13.5 billion, or up 15% versus

a year ago.

The corporate data business posted P8.4 billion (post-PFRS) in revenues this period with the sustained

increase in customer base, circuit count and usage. Globe has been continously modernizing its corporate

data network given its thrust to deliver fast, reliable and secure internet connectivity, as well as provide

advanced business solutions that fit the needs of its enterprise clients. Excluding the impact of PFRS 15

adjustments, corporate data and fixed line voice posted revenues of P8.4 billion and P2.3 billion,

respectively.

On a post-PRFS basis, Globe’s total operating expenses and subsidy amounted to P52.1 billion for the

period, leading to consolidated EBITDA ending at P49.8 billion, with an EBITDA margin of 49%. Net

income stood at P15.2 billion, mainly due to the gains in EBITDA, offsetting depreciation charges and non-

operating expenses booked for the period just ended. Depreciation expenses remained at its elevated level

given Globe’s continued network expansion and acceleration of its LTE and broadband rollout. Core net

income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market

charges, stood at P15.3 billion.

Excluding the impact of the PFRS adjustments, EBITDA stood stood at P49.1 billion, 21% higher than last

year. Net income for the period amounted to P14.6 billion, with core net income ending at P14.8 billion.

Commenting on these results, Ernest L. Cu, President and CEO of Globe Telecom Inc., said:

“Overall, I am pleased with our third quarter results, and we are optimistic that we can sustain this

momentum moving forward. We are happy that more and more Filipinos will now enjoy faster and reliable

internet connection as we draw closer to achieving 95% LTE nationwide coverage. We will remain

aggressive with our network investments, which is now nearly 32% of our revenues to be able to support

the growing demand for bandwidth-intensive applications and content.”

Moreover, in compliance with the directive of the National Telecommunications Commission (NTC),

Globe lowered its interconnection rates for voice calls to 50 centavos per minute from P2.50 per minute

and Short Messaging Services (SMS) to 5 centavos per message from 15 centavos per message effective

from September 1, 2018.

Also, in October 2018, the Bond Trust Indentures were amended to adjust the maximum debt-to-equity

ratio from 2.5:1 to 3.0:1. As of September 30, 2018, the Globe Group is not in breach of any covenants.

Globe ended the first nine months of the year with gross debt-to-equity ratio of 1.93:1 and gross debt to

EBITDA ratio of 2.21:1.

Lastly, we advise that in its meeting earlier today, our Board of Directors approved the declaration of the

fourth quarter cash dividend of P22.75 per common share payable on December 5, 2018 to shareholders on

record as of November 19, 2018. The fourth quarter cash dividend payment total is about P3.0 billion.

Our Board of Directors likewise approved the proposed change in the dividend policy from 75% to 90% of

prior year’s core net income to 60% to 75% of prior year’s core net income, to be applied to the 2019

dividend declaration. The amended policy will provide Globe with increased flexibility with respect to

capital management. This adjustment will also ensure the sustainability of the operations in this investment-

heavy environment, while protecting future dividends, once planned expansion yields beneficial results.

Press Release 3Q 2018 3

For questions, please contact:

Carlo Puno Jose Mari S. Fajardo

Financial Planning and Analysis Investor Relations

Email: jcpuno@globe.com.ph Email: ir@globe.com.ph

(632) 797-4307

About Globe

Globe Telecom is a leading full service telecommunications company in the Philippines, serving the needs

of consumers and businesses across an entire suite of products and services including mobile, fixed,

broadband, data connections, internet, and managed services. Its principals are Ayala Corporation and

SingTel who are acknowledged industry leaders in their respective countries and in the region.

It is listed on the Philippine Stock Exchange under the ticker symbol GLO and had a market capitalization

of US$5.4 billion as of the end of September 2018.

Further information can be obtained by visiting the web at http://www.globe.com.ph