Ayala-led telco giant Globe Telecom Inc. reported an 11-percent drop in net income in the first half of the year as higher expenses offset record revenues and the continued growth of e-wallet giant GCash.

In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday, Aug. 5, Globe said its net income declined to ₱11.04 billion from January to June, compared with ₱12.44 billion in the same period last year.

Globe posted a double-digit decline in profit despite service revenues reaching a record ₱85.37 billion in the first six months, up six percent from ₱80.19 billion a year ago.

In particular, Globe’s mobile segment grew six percent to ₱60.4 billion from ₱57.07 billion, driven largely by the strength of its portfolio monetization and rising demand for data consumption.

Broadband revenues likewise increased six percent to ₱12.44 billion from ₱11.71 billion, as consumers increasingly migrated from fixed wireless to fiber connectivity.

Revenue growth cushioned the impact of higher expenses, which increased six percent to ₱47.79 billion due to higher costs for services and administrative expenses, including higher electricity and fuel charges amid the impact of the Middle East conflict.

Globe also reported higher non-operating charges in the first half, which widened to ₱3.1 billion from ₱980 million, driven by the lower net gain from the dilution of Globe’s stake in Mynt.

Ahead of its planned public listing, GCash parent Mynt continued to be a strong earnings driver for Globe, with its contribution to the telco’s income expanding to 28 percent from 26 percent a year ago. In value terms, Mynt’s equity share slipped slightly to ₱3.7 billion from ₱3.8 billion in the same period last year.

Based on the report, Mynt’s net income declined by nearly two percent to ₱10.8 billion in the first half from ₱11 billion a year ago. Globe holds a 34-percent stake in Mynt.

Despite the profit decline, Globe President and Chief Executive Officer (CEO) Carl Cruz said the company remains committed to improving its services to sustain consumer demand amid a more cautious consumer spending environment.

“As we look ahead, we are committed to shaping Globe’s next phase of growth by strengthening our leadership in connectivity while expanding our portfolio of products and services to deliver solutions that make a real difference in people’s lives and help businesses thrive,” Cruz said in a statement.

“We will invest in our network, technology platforms, and AI [artificial intelligence]-enabled capabilities to improve customer experience, operate more efficiently, accelerate innovation, and help build a more connected and digitally inclusive Philippines,” Cruz added.

Globe has already spent ₱26.3 billion in capital expenditures (capex) during the first half, focusing on expanding its infrastructure assets, including its fiber and 5G footprint.

The telco plans to spend less than $1 billion on capex this year, in line with its efforts to maintain financial flexibility and support its long-term priorities.