Globe Telecom, Inc. (GLO) Earnings Call Transcript & Summary

Welcome to the Virtual First Quarter 2022 Analyst Briefing of Globe Telecom, which we will start with a short presentation from our management team. We'll now hand over the virtual floor to our President and Chief Executive Officer, Mr. Ernest Cu.

Thank you, Jomari. Good morning, and thank you to everyone joining us today. I am pleased to report that Globe is off to a good start in 2022 with service revenue coming in at a new record high of PHP 39 billion, up 4% year-on-year and 3% quarter-on-quarter despite the aftermath of debt and the resurgence of the Omicron variant in the first 2 months of the year, not to mention the lingering effects of the prolonged pandemic on the country's economy. Growth continues to be driven by data, but is now complemented by the improving performance of non-telco services. This is a testament to our strategic push of going beyond to cultivate a robust digital ecosystem for the Philippines. With improved top line performance and prudent cost management, EBITDA likewise grew 8% year-on-year and 9% quarter-on-quarter to PHP 20 billion. Net income grew significantly to PHP 13 billion, an 86% improvement year-on-year and 137% improvement on a quarter-on-quarter basis. We benefited from a onetime gain on the sale of our data center assets last March. Even without this gain, normalized net income would still have grown by 2% year-on-year, while normalized core net income remained flat. Given our strong performance, I'm also pleased to announce that our Board of Directors approved the second quarterly cash dividend of PHP 27 per share on an annualized basis. This represents 68% of full year 2021 core net income. I will now turn the floor over to Is a to discuss our commercial performance in greater detail. Issa?

Thank you, Ernest. Our top line performance was driven in part by the sustained growth of our mobile business, which grew 2% year-on-year and 3% quarter-on-quarter to PHP 27 billion. This was driven entirely by mobile data, which grew to a record quarterly high of PHP 21 billion. This is also the first time mobile data revenue has reached a PHP 20 billion mark, now accounting for 78% of our mobile revenues. On a by brand basis, performance was driven by all our 3 prepaid brands, which now includes GOMO. The brand that utilizes data as currency and geared towards those who mainly use mobile data and for go traditional voice and SMS services. This behavior is evident in the sustained growth of our mobile data traffic on our network, which grew 27% year-on-year to 1,058 petabytes. Also a new quarter new reference for us. Mobile data monthly ARPU likewise grew to 9.4 gigabytes per month, 22% more than last year and 5% more than last quarter. Moving forward into the year, we see encouraging growth in the mobile segment from improved mobility and continuing economic recovery. The home broadband segment, on the other hand, saw a 4% decline year-on-year to PHP 7 billion, driven by the fixed wireless segment, which saw subscribers migrating to wired solutions are shifting their data consumption back to mobile once mobility restrictions were eased. Initially, our Home Prepaid Wi-Fi product was seen as an easily accessible plug and play service, introducing the first-time broadband users to a more affordable and less intimidating alternative to a postpaid plan. However, the growing reliance on data due to the pandemic and recent acceleration of fiber rollout across the industry have relegated our HPW to a backup service. Moving forward, we expect our fixed wireless subscribers to normalize at 1.3 million by year-end. On the other hand, our fixed wired segment sustained its growth across subscribers and revenue, which both grew by 31% year-on-year. This was driven by increased take-up and fiber, which grew 155% versus the previous year, enabled by our accelerated fiber rollout. Furthermore, when Globe pivoted to an accelerated fiber strategy, there was also an effort to migrate our legacy subscribers to fiber, an exercise that we began in quarter 1 of 2021, allowing us to migrate over 260,000 subscribers as of March this year. To date, less than 3% of our subscriber base is left on legacy technology. There's still latent demand in the industry, and we will continue our accelerated fiber rollout to capture that demand. And building on the momentum from previous periods, we have already rolled out close to 500,000 fiber-to-the-home lines just in the first 3 months of this year. Now moving on to corporate data, which is our second growth driver for this period as it grew to almost PHP 4 billion, an 18% growth versus same period last year. Corporate data saw consistent growth in its core account revenue, which grew 3%, but growth was really driven by the fast adoption of our ICT services, which saw its revenue base growth by 59% against last year. Clearly, with businesses rapidly adopting digital solutions, ICT services is driving growth in this segment across multiple services such as cloud solutions, business applications, cybersecurity, data center services, big data and IoT. We are constantly innovating and upgrading our suite of products and services to better serve our customers throughout their digital journey. As such, I am proud to announce the third pillar in business applications and systems integration portfolio company under the Globe Group recently became an elite sales force Summit partner. Salesforce's highest partnership tier of Salesforce's global ecosystem only 10% have attained such prestigious status. And locally, third pillar is one of the first Philippine companies to become a summit partner. And lastly, I am pleased to share that our strategic shift into a digital platform is now beginning to bear fruit with non-telco revenues growing by 252% year-on-year to PHP 800 million. This performance was driven by growth across most of our subsidiaries with some of the more significant ones being AdSpark, Yondu, ECPay and Asticom. AdSpark is the largest local data-powered digital media and creative agency that has launched over 2,800 digital campaigns. ECPay is a multi-payment platform, which now has a general trade retail base of over 136,000. Yondu is one of our leading IT solutions company, providing industry standard, secure and scalable solutions. And Asticom is a shared services company that now serves more than 150 clients from all over the country. That concludes my portion. And I now turn it over to Joel, who will discuss updates on our network.

Thank you, Issa. For the first 3 months of 2022, Globe was able to build 234 new cell sites nationwide, upgraded over 3,500 mobile sites and installed 300 new 5G sites. This was enabled by our CapEx spend of PHP 21 billion, 82% of which was for data-related requirements. This represents 24% of our PHP 89 billion full year CapEx guidance. I'm proud to report that our continued investments and efforts to improve our network have been recognized by both Ookla and Opensignal. According to Ookla, Globe is the most consistent mobile operator in the Philippines for the first quarter of 2022. Opensignal likewise recognizes globe for delivering the most consistent mobile quality in its recent mobile experience awards. Globe top the list for both core consistent quality and excellent consistent quality. These metrics truly speak to the intensive investment that we've made to improve customer experience on our network as we believe that consistency is the most important experience metric because it's not just speed that matters to the customers but also reliability. Depending on the activity, there is a recommended performance threshold working beyond that, it is already perceptible to the customer. So it is more important to maintain a consistent level of quality so as not to disrupt customer experience. And we have delivered on that front, and we plan to sustain this moving forward with our investments and initiatives on the network. We believe our superior network consistency allowed for continued revenue gain on the mobile side, proving what is really important to customers. In addition to consistent network quality, Globe was also recently recognized for 5G video experience in Opensignal's mobile experience awards and was identified as a global rising start in 5 out of 6 key measures of Opensignal's global Mobile Network Experience Awards 2022, namely video experience, voice app experience, download speed experience, upload speed experience and 4G availability. This is the third straight year Globe has been recognized as a global rising start which is defined as the top 30 operators globally, which have showed the most improvement in mobile network experience. That concludes my portion, and I now turn you over to Martha, who will provide updates on Mynt.

Thank you, Joel, and good morning, everyone. I'm here to share highlights of Mynt's strong performance in Q1. In the last quarter, we sustained our market dominance as the #1 finance app in the Philippines. 60 million Filipinos are now placing their trust in cash, which represents 83% of the Philippines adult population. In the market today, while it is good to have a huge registered base of users, the more important metrics should be those actively using the app. Based on reputable third-party platform, data that AI, GCash active users are now 5x larger than the next eWallet. We've seen user engagement rise even as the world opens up. This shows that we have become a major part of Filipino's everyday lives. Our daily log-ins and daily transactions are continuously rising at up to PHP 29 million and PHP 19 million, respectively. With this increase in usage, we are proud to announce that we have already reached the PHP 500 billion mark in this month GTV, hitting PHP 535 billion in March alone. With millions of Filipinos relying on GCash for their daily teams, we further scaled up merchant acquisition and partnerships to widen our robust digital ecosystem. Our merchant and social seller base has grown to PHP 5 million, that's 2.7x larger than Q1 last year and the largest cashless ecosystem in the Philippines. We've expanded our cash-in and cash-out outlets to 232,000. 5.5x higher year-on-year, offering the most touch points for our users. To help us in the digital lifestyle, we have onboarded more than 420 GLife merchants as of Q1 this year. This is from our expansion into new categories like content, health, insurance and government. With all these, GCash is still undoubtedly the leading finance app in the Philippines in terms of users, usage and the ecosystem around it. We were able to do this while achieving profitability through multiple revenue streams, a fleet that only a handful of fintechs in the world have been able to achieve. At GCash, we want to help address a real concern of unbanked Filipinos, that of having money readily available whenever they need it, especially drilling emergencies. While other players are just launching their financial services because of their digital banking license, Mynt has been offering various relevant lending products and financial services as early as 4 years ago. GCredit is our first foray into digital lending. GCredit has already provided PHP 29 billion worth of credit line to qualified users since its launch in 2018. Next, we have GLoan quick cash loans offering with affordable and fair leads. In just 10 months since we launched, we were able to disburse up to PHP 2.2 billion worth of loans. Our most recent launch is GGives, our buy-now-pay-later proposition with accessible installment options. Since our launch in December 2021, we have disbursed a total of 130 million connected with 85,000 merchant partners. All these are powered by our strong in-house trust platform called GScore, that helps us assess credit worthiness and ensures proper controls in our lending services. Through digital innovation, we were able to make headway into the mystifying financial services for the Filipino Public. Our goal is to let people know that these services are not just for the privilege, but for everyone. With GSave, which has been live in the GCash app since December 2018, we encourage Filipinos especially the unbanked to open a digital savings account. In Q1, we grew our base to 5.3 million registered users. Our study show that one out of every 5 backed adults has a GSave account. Now we are launching GSave Marketplace, offering our users a choice of which bank and savings products suits them. We will soon have one of the biggest and most reputable banks in the country, BPI as part of our GSave marketplace, offering savings products to our users. On top of this, CIMB, the current partner of our GSave product is also hiking deposit interest rates up to 7% per annum for new account holders. Our investment marketplace GInvest, gave our users access to a total of 7 local and global funds with 2 new funds in partnership with BPI Investment Management, Inc., or BIMI. We now have 2 of the biggest companies in ATRAM and BPI offering various products in our marketplace. We launched this in July 2018, and now have 3 million registered users, representing 77% of the UITF accounts in the Philippines. GInsure helps protect Philippines and their families from breaking the back in times of emergency by providing easy access to insurance. Since its launch in October 2020, we have grown our offer to 24 various product offerings for more -- from more than 10 of the biggest insurance companies in the country. This range from health to vehicle and Lifestyle Insurance. On the crypto front, GCash is now also available as a mode of payment across several exchanges. This makes it so much more convenient for users to pay for their capital transactions. In summary, across the financial services landscape, we partner with and are trusted by the most innovative and biggest market players from savings, invest, insurance to lending as we change the game and democratize financial access to Filipinos. To further vision towards financial inclusion, we continue to expand in other regions across the country. We are doing this via channel expansion as seen on the slide, and more localized marketing such as changing dialect on their ads. We've also done a lot of activations across the country. By expanding our efforts to the community level, we've already onboarded over 240,000 sari-sari stores. The same goes for our partnerships with [ Palankes ], now with 20,000 vendors onboarded, [indiscernible] with 31,000 drivers, and we are now present in 15,000 converged zones. Through these efforts and partnerships with LGUs, we have made financial services available to tricycle drivers and web market vendors. We have also given sari-sari store owners access to these services as well as additional livelihood opportunities. These channels are key for us to reach our vision of finance for oil. That ends my segment. Q1 was a strong start to 2022 for GCash. We have so much lined up for the months ahead as the world opens up, and we continue our efforts to make Filipinos everyday lives better. I now hand you back to Ernest for the next part of the presentation.

Thank you, Martha. And congratulations again on GCash's great results. As announced last March, when we closed the transaction, Globe has finalized the partnership between STT GDC, Singapore Telemedia, ST Telemedia Global Data Center group and Ayala to subscribe to new shares of KarmanEdge Inc., which will house the carved-out data center business of Globe. The post-money valuation of the transaction is in the range of PHP 300 million with Globe to receive proceeds in the amount of USD 100 million, which it will use for our future expansion and growth. The JV is looking to grow its data center capacity to 100 megawatts in the next years from a current maximum expandable capacity of 30 megawatts. Additionally, through the transaction, Globe recognized a pretax gain of around PHP 10.5 billion from the sale of our current data center assets as well as the revaluation of the carrying value of Globe's retained interest. Post execution, Globe will retain 50% ownership while STT will own 40% and Ayala Corporation, the balance of 10%. I'm also pleased to announce that our Chief Information Officer, Carlo Malana has taken on the role of CEO of KarmanEdge as of last May 1. Also, as mentioned earlier by Issa, our strategic thrust to leverage the Globe Group's assets to further expand the digital ecosystem is starting to bear fruit. While some subsidiaries directly contributed to the group's top line, other investments that are accounted for as joint ventures or affiliates will contribute to the group through their share in equity gains. The most notable at this time is GCash, which has recently started to contribute a positive gain, while others are still in the early stages and have yet to become profitable. Others still will bring value in different ways, whether through business synergies or the enrichment of the ecosystem. Regardless of the different effects on the Globe Group, we continue to see great potential in these companies and foresee them bringing even more value financial or otherwise, to the group in the future. One such company being enabled by the Globe Group was recently launched last April. So I will now turn you over to Ian Monsod to introduce KROMA Entertainment. Ian?

Thank you, Ernest. I'm proud to introduce KROMA Entertainment, the Philippines' first TraDigital media entertainment company that connects the audience using traditional mass media platforms, enhanced with digital touch points. We hook and have bitten with new ways to engage with world-class entertainment in order to elevate Filipino artists and content to the world stage. These are the various brands that span across KROMA 8 lines of businesses. First, Anima is the home of our storytellers, whether short or long form video or broadcasts. Previously known as Globe Studios, it has produced a lot of Philippine first such as the first Philippine original film on Netflix, Dead Kids, the first Philippine original series on HBO On the Job: The Missing 8 and more. Aside from these, we have collected more than 60 local and international industry awards and citations patients. Next, LiveMNL is our live events and activations arm, also multi-awarded for its various live theater productions. LiveMNL does hybrid physical and online events that enable Globe to adapt and thrive in customer activations despite the pandemic constraints. Then you move to Paradise Rising our first music label in partnership with American Label 88Rising. We have Wonder and FreebieMNL, our digital publishing businesses own labels, focused on lifestyle and deals. Then we have NYMA or now you must aspire our brand-new talent business. There is Secret Menu, our B2B video production unit. There's also Upstream, our premium pay-per-view OTT service and acquisition distribution arm; and finally, PIE. PIE is short for Pinoy Interactive Entertainment. Our first TraDigital and fully interactive channel to be launched on May 23. PIE is the only multi-screen real-time interactive entertainment that can bring people together through shareable experiences that are fun rewarding authentic, inclusive and meaningful. Upon launch, our programs will be making its way into the hearts of 11 million digital TV and select pay TV households in key areas nationwide. If you're not in our coverage area, we still got you. As long as you're online, you can enjoy PIE via YouTube, iWeb and GCash GLife. Yes. 61 million GCash users can watch by within GLife. Fresh from the oven, please meet the bakers of PIE, the country's foremost content and technology players, KROMA, ABS-CBN 917Ventures and BEAM, our partner station. That ends my portion, and now I turn you over to Rizza, who will discuss Globe's financial highlights.

Thank you, Ian, and good morning, everyone. To summarize the earlier points, gross service revenue for the quarter came in at PHP 39 billion, which is a record high and was 4% higher year-on-year. This revenue performance as well as prudent cost management contributed to EBITDA improving by 8% to PHP 20 billion or 50% of service revenues. Reported net income stood at PHP 14 billion for the period, also an all-time high, but driven by the onetime gain related to the partial sale of our DC assets. Stripping off this onetime gain, normalized net income still improved by 2% year-on-year and 37% quarter-on-quarter on the back of higher contribution from Mynt. Normalized core net income remained flat year-on-year and was up 36% quarter-on-quarter. On the next slide, looking at our costs, Total marketing and subsidy costs dropped by PHP 643 million, while staff costs for the first 3 months of the year grew by PHP 325 million or 8% year-on-year. Network costs grew by PHP 271 million versus the previous year, driven by increased in utilities, supplies and other administrative expenses as well as higher repairs and maintenance charges. These expenses, on the other hand, declined year-on-year due to a few short-term lease contracts now being accounted for under the ROE model. Provisions slightly declined by PHP 183 million, while service and other expenses grew 2% or PHP 140 million, mainly from higher security, freight an increase in miscellaneous bank charges, countered by lower charges on Cloud, advisory fees and other contracted services. I'd also like to quickly walk you through the onetime gain we incurred and its effect on our P&L. The total amount of PHP 10.5 billion included a gain on the sale of our data center assets as well as a fair value gain on Globe's retained in trash and is net of transaction fees. If we exclude the impact of this, nonoperating charges for the period would have been at PHP 2 billion, almost the same level as the previous year. and normalizing as well for the impact of the CREATE Tax law in the first quarter of 2021. Net income would have been at PHP 5 billion, 2% better year-on-year. On the balance sheet, this remains healthy and even improved against end 2021 levels on the back of sound capital management and improving EBITDA. Our gross debt level is currently at PHP 218 billion. In terms of ratios, gross debt to equity and gross debt to EBITDA have improved to 1.7x and 2.4x, respectively. Similarly, debt service coverage ratio is much better at 7x. Taking into account our record high revenue performance for the first quarter as well as the trends that we have been seeing in April. We are pleased to announce that we are upgrading our 2022 revenue guidance from low single digit to mid-single-digit growth. And on the other metrics, which we provide guidance on, which would be EBITDA, we're keeping it at 50%. And likewise, for CapEx, we're keeping it about PHP 89 billion for the full year. So this ends our presentation, and I now would like to turn you over to Jomari for any questions. Over to you, Jose.

Thank you, Rizza. Before we begin with the Q&A session. We would like to acknowledge our management panel. We have Mr. Ernest Cu, President and Chief Executive Officer; Ms. Rizza Maniego-Eala, Chief Finance Officer; Ms. Issa Guevarra-Cabreira, Chief Commercial Officer; Attorney Froilan Castelo, our General Counsel; Mr. Joel Agustin, Head of Network Planning and Engineering; Ms. Martha Sazon, President and CEO of Mynt; Mr. Darius Delgado, Consumer Mobile Business Head; Mr. Tek Olaño, Chief Finance Officer of Mynt; and Mr. Ian Monsod, CEO of KROMA Entertainment. We'll now open the Q&A session. With the first question coming from -- with the first set of questions coming from Gio dela Rosa of Regis Partners. The first question is for Issa. Mobile revenue was up quarter-on-quarter remarkably. To what do you attribute this game, do you think the intensity of competition from PLDT and our DITO has waned?

I think our Head of Mobile would gladly answer that question for us, Jomari.

Thank you, Issa. Thanks for this question and then good morning to everyone. So on the overall, we've seen renewed momentum across all brands in terms of both subscribers and spend given increase in mobility starting March, some lift from election spending and their differentiated campaigns and initiatives launched between Feb and March have been gaining traction where we focused more on elevating customer experience and relevance, where we launched unique offerings beyond connectivity that actually leverage the assets we have in the Global Group. We also sustained competitiveness in the connectivity front, where we saw MDS revenues reached an all-time high for the quarter, but equally important is a consistent push towards digital channels, of which GCash and Globe are key, where huge momentum in GCash continues a solid proof point of synergies that deliver results. And of course, the improving network experience also definitely drove such remarkable growth as we led the market in terms of consistency scores based on both Ookla and Opensignal in quarter 1, recovering fully well from the impact of our debt in the beginning of the year. In terms of competitive intensity, though, I think it remains relatively the same and rationale at that as we observed the PLDT stayed the course in their MDS offers. And DITO has started monetizing their network investments with the refreshed portfolio intended to upsell customers to the higher [indiscernible] or SKUs. So net-net, all good for the mobile industry as a whole so far.

The next question for Rizza. It consists of 2 parts. Can you provide some guidance on the business prospects of the recent final data center business? And what kind of revenue or earnings potential do you see for that business?

Thank you for that question or for the 2 questions, actually. On the first one, we are very bullish on this space and believe that there are several waves of demand that will help keep the growth rates in the range of double digits over the midterm. There is the enterprise demand that is more near term and the big hyperscaler demand that's already coming in. In our projections, DC demand is seem to increase, possibly threefold over the next few years. Now on the second question, for us, we feel we have the right mix of shareholders as well as perfect timing to catch majority of the demand that I just talked about.

The next question is for GCash for Martha, of course. And it consists of 2 parts. Mynt seems to be already quite profitable in first quarter 2022. Can you share what's driving profitability? How will the suspension of EDSA affect revenue or income?

So we have declared before the San represents only a small part of the business. So the reason directive has no significant impact to us. Our Q1 performance so that the business and revenues are on good trajectory. We're proud to see that cash adoption is at an all-time high, even with the binding up of the economy. This shows that Filipinos have embrace digital tools and transitioning to digital life. With our various product launches across the year, use case diversity among our base has improved from around 2 use cases previously. But now at more than 2.6 use cases, consistent with the thrust of increasing our relevance to our users' daily habits. In fact, on the financial services space, 1 out of 3 of our active users of financial services already. We're optimistic about our performance for this year. We forecast to end 2022 with positive EBITDA and looking at better results than last year.

The next set of questions come from Rachel Rodriguez of Maybank. Again, the first question is for Rizza. Are you looking to sell more of your data centers? And how do you plan to deploy the proceeds on the sale?

Well, we just sold a chunk of our data centers and the portfolio we carved out a sufficient expansion potential. So for now, we are focusing our efforts on expanding those before looking at options for internal captive DCs, which are more tied up to our core telco operations. In terms of the proceeds flowing in the Globe, then we intend to use that for our network investments.

The next question again is for you, Rizza. Are you also considering the sale of your towers?

This has always been an option for us. And given the recent transaction of our competitor, it has made the environment more friendly for this type of transaction. We are continuously looking at all options for our company, and we'll pursue what's best after evaluating what options we may take. But for now, I think just like in the previous sort of or in the past 18 months, the focus is to enable the same tower companies on their build-to-suit efforts, and so we're partnering with them. And if things change, then we will update the market for any further development.

The next question is again on Mynt for Martha. How much impact does collaboration with the banks, i.e., CIMB and BPI have on GCash GTV and profitability?

Well, through our collaboration with the banks such as CIMB, BPI and other financial institutions, such as ATRAM. We've been able to gain headway into the mystifying and democratizing financial services for Filipinos. Today, 1/3 of our users are subscribed at least one of our financial services products and 1 out of 5 bank add-ons has a GSave account. In terms of investments, 77% of total UITF accounts are delivered by our GInvest platform. All this contributed to the growth of GCash's GTV. I'll be able to do not disclose this particular cuts and the unit economics of GCash as a whole.

The next set of questions come from German de la Paz from Abacus. And the first question is for Rizza. How do we differentiate core versus normalized core net income?

More or less core net, as mentioned in my presentation, strips out the onetime gain on the data center carve-out for this -- for the last quarter, the first quarter of 2021. In the second quarter -- in the first quarter and the same period last year, we also took out the onetime impact of the CREATE law to come up with normalized core net. And so normalized core net is flat year-on-year.

The next follow-up question from Herman is also for you. May I ask what cost a 31% year-on-year decline in core income.

This is due to the inclusion of the impact of the CREATE law. As I mentioned in my answer just a few seconds ago, which we booked in the first quarter of 2021. So really, you should look at the PHP 10.5 billion onetime gain in 2022. That's pretax, after tax is PHP 8.5 billion and PHP 2.3 billion upside on CREATE in the first quarter of 2021. And so we showed the normalized picture. And again, I reiterate that on a normalized basis, core net income was flat year-on-year.

The next question is for Issa. What would be the drivers for service revenue growth for this year?

Thanks, Jomari for that question. I mentioned in my section across all 3 businesses, we did post very respectable growth rates on the mobile front. Clearly, people are starting to go out. So the mobility has clearly increased once again the mobile data usage of our customers. On the broadband front, as mentioned, we continue to build inventory for our customers. Therefore, consumption has also increased in terms of fiber traffic for us. And clearly, on the corporate data, as mentioned, the transformation, the digital transformation journey that a lot of Philippine organizations have embarked on has also clearly positively impacted our corporate data business. So very optimistic, as Rizza has shared earlier. It's looking like the opening up of the economy is very good for us here in across all businesses.

Okay. Thank you, Issa. The next question comes from Arielle Santos of Regina Capital, and this is for Rizza. The Globe booked any extra or additional Typhoon or debt-related charges in the first quarter of this year?

No, we did not have any.

Okay. The next question comes from [indiscernible] of Maple-Brown Abbott. The first question is marketing and subsidies declined. Is it projected to remain at this level going forward?

It's hard to give projections since we're we still have at least 8 months of the year to go. And I think we're just sticking to our guidance of EBITDA target of 50% for full year.

Okay. Thank you, Rizza. The next question again is for you, Rizza. On tower lease fees, would that keep at current rates? Or do you expect that to increase with more data usage?

In terms of our lease fees, we have MLAs in place with the different tower companies. That would govern lease terms. And so growth on that front would be more related to volume of towers. And so again, right, I think very tough to give a specific guidance on details of costs. But from a management perspective, we are really managing both our top line and our expenses to be in line with our target of keeping at a 50% EBITDA margin.

Thank you, Rizza. There are currently no questions in the queue. Again, if you would like to ask questions, please send them to [email protected]. Well, as there are no further questions in the queue, we'll now end the Q&A session. Before we adjourn Ernest, do you have any final thoughts.

No, I just want to thank everyone from joining the briefing today. I think, overall, we've had a very good quarter with the recovery of the mobile business. It looks like with the 1 month we had for lower alerts and more open economy in the first quarter, we were able to recover quite a bit of growth. So it bodes well in the second quarter. Another message for us is that the subsidiaries that we've been building over the years has now started to bear fruit and have generated revenues of about PHP 750 million in the first quarter. And we hope that this trend will continue. GCash continues on its merry way and continues to dominate the space and fintech despite all the noise that we hear from various groups out there and all of the [indiscernible] over a digital banking license. We expect that GCash will move from strength to strength as they develop their lending business and add on additional investment products and the soon-to-be launched crypto services within the app. You heard from Ian about KROMA. KROMA, again, is one of these businesses that we've incubated out of 917Ventures. Stitching together a lot of the activities you've been doing and also incubating for the past few years, and we have high hopes that this would generate significant profits. As we have seen with companies like ABS-CBN in the past. So again, thank you very much, and we look forward to seeing you in the second quarter.

Thank you, Ernest. And on that note, we conclude the virtual first quarter 2022 Analyst Briefing Globe Telecom. We wish to thank again all of you who joined the call. I hope you'll join us again for our second quarter 2022 analyst briefing in early August. Again, we wish everyone a pleasant good morning. Stay safe, everyone, and vote wisely on Monday. Thank you.

Thanks, everyone.