Globe slashes 2023 capex to secure sustainable cash flow

(Photograph courtesy of Globe)

After all time-high spendings in the last few years, Ayala-led Globe Group only allotted $1.3 billion (approximately P71.99 billion at the current rate) for its capital expenditure program this year, or a reduction of over 30 percent from last year’s budget.

The company said Wednesday the reduction will allow the company to ensure the sustainability of its free cash flow generation as it shifts toward capital efficiency and optimization.

By 2024, the company aims to further drop its capex to just $1 billion as part of its “commitment to responsible financial management.”

Globe Chief Finance Officer Rizza Maniego-Eala, however, assured that the company’s efficiency efforts will be implemented “without sacrificing customer experience and revenue opportunities.”

“We are proud to have spent record-high levels. At the same time, we recognize the importance of a healthy balance sheet and sustainable operations. As such, we are shifting our focus into strengthening our free cash flow position,” Eala said.

In 2022, Globe spent P101.4 billion to finance network buildup and expansion. The spending was 9 percent higher than the previous year’s allotment.

The majority or 86 percent of the investment was allocated for data requirements to ensure customers were provided with internet services as demand grew.

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