Globe is optimizing its capital expenditure (capex) by investing P13.7 billion in the first quarter of 2024, marking a 22% reduction compared to the same period last year. According to the company, this investment strategy aligns with its objective to lower capex following the peak levels achieved in 2022.
In the first quarter of 2024, Globe’s capex was 33% of its total service revenues, a decrease from 44% in 2023.
“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, chief finance officer, Globe.
A significant portion or 91%, of the first quarter capex, was used to expand and enhance the data network. This investment primarily targeted improvements in Globe’s mobile network, as the company shifted its fiber strategy from rollout and expansion to optimizing port utilization.
Capex guidance
For the full year 2024, Globe has set a capex guidance of $1 billion, which is lower than in previous years, with plans to reduce spending to below $1 billion by 2025. The capex-to-revenue ratio has seen a reduction from 64% in 2022 to 44% in 2023.
The funding for this year’s capex comes from a mix of operating cash flow, asset sales proceeds, and controlled debt financing.
Globe’s capex strategy enables the company to make strategic investments in data network enhancements, maintain capital efficiency, and uphold its market leadership while offering innovative digital solutions to customers throughout the Philippines.