Globe Q2: Core telco strength tempered by Mynt softness

From AB Capital's The Opening Bell: Three Moves

Event

Globe Telecom (GLO) delivered resilient 2Q26 operating results, with revenue and EBITDA rising 8% YoY and 6% YoY, respectively, both tracking 49% of our FY26E. However, core net income declined 11% YoY to P5.3 billion, bringing 1H26 earnings to 47% of our FY26E, as higher financing costs, depreciation, and weaker Mynt contributions weighed on earnings.

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Results reinforce the strength of GLO's core telco business despite weaker earnings conversion. Wireline remained the standout performer, with revenue and EBITDA both growing 14% YoY on strong enterprise data (+23%) and broadband growth (+6%, with 129,000 fiber net adds). Wireless also remained healthy, with revenue up 6% YoY and mobile data traffic rising 16%, although softer data yields (P14.2/GB vs. P14.8/GB in 1Q26) point to continued trade-down behavior. Mynt contribution declined 12% YoY to P1.8 billion due to a high base and heavier investment in user acquisition and technology, but management continues to view this as a temporary drag.

Catalyst

Key catalysts include: (1) final initial public offering (IPO) pricing for Mynt, (2) continued enterprise data and broadband growth, (3) monetization of fintech and digital infrastructure businesses, and (4) normalization of financing costs and associate income supporting earnings conversion.

Action

We maintain our OUTPERFORM rating as GLO's core connectivity business continues to demonstrate resilience despite near-term pressure from Mynt and higher financing costs. At 12.4x FY26E price-to-earnings (P/E) with a 5.8% dividend yield, we believe valuation remains supportive while fintech and digital infrastructure provide additional medium-term upside.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.