Telco giant Globe Telecom Inc. reported a net income of P7 billion in the first quarter, up three percent from P6.8 billion a year earlier, despite a three percent decline in consolidated gross service revenues to P39.9 billion.

In a report over the weekend, the Ayala-backed telco said profit increase was mainly driven by higher equity earnings from affiliates and a one-time gain from the disposal of its stake in Mynt, the operator of mobile e-wallet GCash.

“Notwithstanding our first-quarter results, we remain steadfast in driving our strategic agenda forward and unlocking greater operational efficiency across the business,” Globe president and CEO Carl Raymond R. Cruz said.

“The growth in net income, healthy margins, and rising contributions from Mynt are a testament to our disciplined and effective execution. These results reflect the solid foundation we’ve built as we continue to transform into a digital solutions partner of choice for Filipinos,” he added.

The company booked a P2.6 billion gross gain from the dilution of its ownership in Mynt, following Mitsubishi UFJ Financial Group’s acquisition of an 8 percent stake in the digital finance firm.

Globe’s share of Mynt’s equity earnings surged 86 percent to P1.8 billion. It now accounts for 22 percent of its pre-tax net income, up from 11 percent a year ago.

Core income down

Excluding non-recurring items such as the Mynt gain and past tower sale and leaseback transactions, Globe’s core net income fell 22 percent to P4.5 billion from P5.8 billion, weighed down by higher interest expenses and non-operating charges.

Operating expenses dropped 4 percent to P19.1 billion as Globe pursued cost-efficiency measures.

EBITDA stood at P20.8 billion, down 3 percent year-on-year, but the company maintained a healthy EBITDA margin of 52.1 percent, exceeding its full-year target of 50 percent.

Globe spent around P8.5 billion in capital expenditures from January to March, down 38 percent from P13.7 billion last year, as it continued to optimize spending while maintaining strong network investments.