Globe Telecom (GLO) Q2 2024 earnings summary

Executive summary

• Consolidated gross service revenues for H1 2024 reached PHP 82.2B, up 4% year-on-year, driven by strong mobile and corporate data revenues.

• EBITDA grew 7% year-on-year to PHP 43B, with a margin of 52%, exceeding full-year guidance.

• Core net income for H1 2024 rose 21% year-on-year to PHP 11.7B, supported by robust EBITDA and higher equity share in affiliates.

• Mynt (GCash) valuation doubled to $5B after new investments, with Globe's equity share and earnings from Mynt up significantly.

• Sale and leaseback of towers completed, with gross proceeds reaching PHP 85.2B.

Financial highlights

• Mobile revenues hit a record PHP 58.4B, up 7% year-on-year; mobile data revenues up 9% to PHP 48B, now 82% of mobile revenues.

• Corporate data revenues grew 8% year-on-year to PHP 9.8B, driven by ICT and core data services.

• Home broadband revenues declined 6% year-on-year to PHP 12.1B, with fiber segment growth partially offsetting fixed wireless decline.

• CapEx for H1 2024 was PHP 28.3B, down 25% year-on-year, with 91% allocated to data requirements.

• Free cash flow after interest payments at PHP 6.7B; excluding tower sale proceeds, improved to -PHP 7.5B from -PHP 28.9B in 2023.

Outlook and guidance

• Service revenues expected to grow low to mid-single digits versus 2023, with EBITDA margin guidance maintained above 50% for full year 2024.

• CapEx to drop to $1B in 2024, targeting 30%-35% CapEx to revenue ratio.

• Free cash flow expected to further improve as CapEx and PO issuances are reduced, targeting positive free cash flow by 2025.

• Positive growth in overall broadband revenue expected in H2 2024, driven by GFiber Prepaid and stabilization in fixed wireless.

• Tower sale and leaseback deal nearing completion, with 88% of towers transferred as of July and full completion expected in H2 2024.