Globe expects to finalize its landmark tower sale and leaseback deal by the end of 2024. As of July this year, 88% of the towers in the portfolio have been officially transferred to the tower companies, generating around Php 85.2 billion in gross proceeds. This significant financial inflow is expected to support Globe’s strategic initiatives and further strengthen its financial position.

Also, as part of Globe’s strategy to optimize capital deployment, the company slowed down its capital expenditures (capex) investment by 25% in the first six months of the year, aligned with its goal to achieve positive cash flow by 2025.

Rizza Maniego-Eala, Globe’s Chief Finance Officer, expressed confidence in the timeline for the completion of the sale.

“We are aiming to complete 100% of our tower sale by this year. However, even if we only reach about 92% by December, we will still be on track, considering that the fourth tranche of our tower sale came six months after the first three transactions,” she said.

The tower sale, which started in 2022, has seen significant progress throughout 2024. Globe successfully transferred an additional 48 towers to Phil-Tower Consortium, Inc. (PhilTower) on June 21, for approximately Php 710 million.

On June 28, Globe handed over 140 towers to Miescor Infrastructure Development Corporation (MIDC) for Php 1.68 billion. Simultaneously, 187 towers were transferred to Frontier Towers for approximately Php 2.38 billion.

By July 23, Globe completed the transfer of the last batch of 1,037 sites to Frontier Towers for Php 13.17 billion, marking the full completion of its Tower Sale and Leaseback Deal with the company.

In his recent State of the Nation Address, President Ferdinand Marcos, Jr. emphasized the importance of common towers for national connectivity, a strategy that Globe President and CEO Ernest Cu fully supports.

“This (referring to the President’s statement) reinforced Globe’s strategy of using common towers,” Cu said.  “We believe in the concept that shared tower cost and shared tower build reduces the capex requirements for the telcos. We hope that with the reduced Capex requirement, we’ll be able to collectively put up more towers between the towercos and us.”

With the tower sale almost completed, Globe’s financial outlook remains optimistic.

“Our free cash flow after interest payments  for the second quarter of 2024 already entered positive territory, which included  proceeds from our tower sale initiative,” said Maniego-Eala.

She added:  “We expect the momentum coming from strong operating cash flows to continue through to next year, driven by both top-line growth and our efforts on cost and investment optimization. This positions us to continue posting free cash flow positive results in 2025, even without one-offs.”

To achieve sustainable free cash flow, Globe invested Php 23.8 billion in capex in the first half of 2024, a 25% drop from 2023, consistent with its capex guidance of USD 1 billion this year as part of its sustainable capex spending strategy.

This capex investment, equivalent to just 34% of Globe’s topline, marks a significant decrease from the 44% Capex-to-revenue ratio recorded in 2023. Globe aims to return to the industry’s average levels, targeting a Capex-to-revenue ratio of 30-35% for the year.

As Globe continues to optimize its investments, the company is poised to maintain its leadership in the telecom sector while ensuring sustainable growth and profitability in the years ahead.

To learn more about Globe, visit www.globe.com.ph.