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Business

Converge profit jumps by 22%

Elijah Felice Rosales - The Philippine Star

MANILA, Philippines — Converge ICT Solutions Inc. enhanced its profitability in the first half of the year, approaching the latter half with optimism on market expansions in Visayas and Mindanao.

Converge yesterday announced that its net income went up by 22 percent to P3.95 billion in the first semester from P3.25 billion a year ago, as it speeds up the installation of fiber cables in the unserved and underserved areas of the Philippines.

Revenue gained by the firm owned by billionaire Dennis Anthony Uy ballooned by 36 percent to P16.05 billion from P11.78 billion, as both residential and enterprise segments recorded double digit growths.

During the period, revenue from residential customers soared by 38 percent to P14.1 billion. On the other hand, income from the corporate bracket spiked by 26 percent to P1.97 billion on new bookings mainly from small and medium enterprises.

Converge said its cost of service grew by 31 percent to P6.33 billion from P4.82 billion on increases in depreciation and amortization costs. Likewise, service cost went up as a result of repairs and maintenance undertaken by the firm to support its improving network base.

Converge CEO and co-founder Dennis Anthony Uy said the internet provider plans to expand its reach mostly in Visayas and Mindanao for the rest of the year.

“We will continue to expand as we aim to serve the connectivity needs of our people, which we hope will also help aid the country’s economic recovery amid the continued threat of COVID-19 and inflationary pressures due to the unstable external environment,” Uy said.

Converge chief financial officer Matthias Vukovich, for his part, said the firm expects its revenue to go up by at least 25 percent this year, attributing his optimism to ongoing fiber projects seen to bring in new customers into Converge’s fold.

Vukovich added Converge lowered its capital expenditure guidance to between P21 billion to P23 billion from P26 billion to P28 billion, after bringing down the cost of installing fiber ports by P1,000 to P3,000 per unit. He also said the capex reduction lessens the need to acquire fresh loans with interest rates rising.

On the service end, Converge expects demand for fiber internet to remain strong in spite of the impending return to in-person classes. The firm hopes to increase its residential subscriber base by two million by the end of the year.

After installing close to 650,000 fiber ports in the second quarter, Converge has passed through 13.49 million homes or 52.1 percent of total households as of June,

Converge seeks to cover at least 55 percent of Philippine households by 2023.

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