EconomyEditor's PickGlobe seen on track to meet 2022 revenue target

November 16, 2022

GLOBE Telecom, Inc. is on track to achieve its full-year target of mid-single digit revenue growth, financial research firm CreditSights, Inc. said, citing sustained subscriber demand.

The company is also on track to meet its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin target of 50%, Fitch Group’s CreditSights said in an analysis e-mailed to reporters on Wednesday.

The research firm expects Globe’s fourth-quarter earnings growth to be supported by “sustained subscriber demand (aided by the upcoming holidays) and further moderation of fuel prices” from highs hit in the first half.

Globe saw its nine-month attributable profit grow 37% to P24.9 billion from P18.2 billion previously. Total revenues for the period went up 3% to P130.2 billion from P126.4 billion in 2021. The growth was led by corporate data and mobile services, supplemented by the sustained growth from non-telco services.

CreditSights described Globe’s financial results for the January-to-September period as “stable.”

“Revenues and EBITDA rose 3% and 5% year on year respectively on the back of healthy mobile data and enterprise data demand,” it noted.

The research firm also maintained its “outperform recommendation” on Globe.

According to finance website Investopedia, “outperform” means that the company “will produce a better rate of return than similar companies, but the stock may not be the best performer in the index.”

“We think valuations are attractive and have not fully priced in the company’s recent credit positives (P17-billion equity rights issue and soon-to-conclude P91-billion tower sale and leaseback),” CreditSights said.

“While liquidity was tight (unrestricted cash of P14 billion versus P55 billion of short-term debt as of Sept. 30), we draw comfort in Globe’s strong banking relationships that should allow for easier debt rollover and refinancing,” the research firm added. — Arjay L. Balinbin

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