$GLO could skyrocket if it scraps dividend to heed DU30 calls for network investments
The 1H 2020 results of Globe Telecom (GLO) showed a slowdown in the net cash flows from operating activities by -31% to 24.3 Billion Pesos. The result marked the effect of the COVID-19 pandemic on the telecommunications industry in the Philippines. The slowdown in the operating cash flows indicates that it has to conserve cash. Let it be noted that Globe was fast in letting go of its employees and in closing some of its store fronts. Globe has to conserve cash especially that based on its first half results it has total loans payable before the year ends of 22 Billion Pesos while its cash balance stood at only 14.8 Billion Pesos. It has limited resources at it disposal at this time. With cash flows from operations slowing, GLO has to borrow more to fund its capital expenditures. With no less that the President of the Republic calling them to improve their services before the year ends, Globe can not abandoned their capital expenditures using the pandemic as an excuse. The President...