earnings reports

Converge ICT profits surge 78% to P3.4 billion in 2020

Aika Rey
Converge ICT profits surge 78% to P3.4 billion in 2020

FINANCIAL RESULTS. Converge ICT Solutions holds a press briefing on its 2020 earnings report on March 11, 2021.

Screenshot from Converge ICT Solutions

Converge ICT Solutions grows its residential subscriber base twofold in 2020

Notwithstanding the coronavirus pandemic, listed fiber broadband firm Converge ICT Solutions posted high double-digit growth with a larger subscriber base.

Converge’s net income grew 78% to P3.38 billion in 2020, from P1.91 billion in 2019. Consolidated revenues, meanwhile, jumped by 71% to P15.65 billion year-on-year.

“People are hungry for a better internet service in the country,” said Converge chief executive officer and co-founder Dennis Anthony Uy – not to be confused with Dennis Uy of Dito Telecommunity.

The impressive performance was driven largely by its residential segment, as the demand for fixed line services rose due to the pandemic.

Its residential business earned P12.63 billion – almost double from P6.35 billion in 2019 – as subscribers grew twofold to 1.04 million.

Converge’s enterprise business revenues also grew by 9% to P3.02 billion. Even as 2nd quarter revenues declined to P661 million, the steady performance during the 3rd and 4th quarter held up its enterprise business.

Converge said there was a rise in demand in small and medium enterprises clients, as well as new wholesale contracts with the government and large international carriers.

Converge did not tell the media about its profit guidance for 2021, but its chief financial office advisor Matthias Vukovich pointed to its EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 52.5% in 2020 from 51% in 2019 as an indicator of profitability.

In 2021, the fiber provider aims to spend P20 billion for capital expenditures, including expenses for fiber-to-the-home ports rollout to reach 35% of Philippine households and the costs for the construction of domestic subsea cables.

Converge aims to breach the 1.5-million subscriber mark by the end of 2021. By the 2nd quarter, it will do a full commercial rollout in new areas in the Visayas and Mindanao. – Rappler.com

Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.