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Converge sustains strong growth in H1 2021

Aika Rey
Converge sustains strong growth in H1 2021

STRONG GROWTH. Converge executives talk to the media on August 12, 2021.

Converge ICT Solutions screenshot

Converge ICT Solutions says it does not see any slowdown in its growth as net income from January to June 2021 nearly matches the level for the entire 2020

Listed fiber broadband provider Converge ICT Solutions sustained its strong growth during the first half of 2021, as profits zoomed 158% to P3.25 billion.

On Thursday, August 12, Converge presented its first semester earnings. Net income from January to June 2021 almost reached its full-year profits in 2020.

Revenues hit P11.78 billion from January to June, an 82% growth from 2020 figures. The residential business continued to drive up the top line to P10.21 billion, double from the same period a year ago.

The company has already activated its backbone nationwide, launching commercially in key areas in the Visayas and Mindanao. It plans to launch in more areas in the two island regions during the second half of 2021.

Converge said new residential subscribers reached a record high of 173,356 for the second quarter, bringing the total to 1.36 million.

Asked if Converge would be able to sustain its growth for the coming months, chief financial office advisor Matthias Vukovich said the firm is “not seeing any slowdown.”

He pointed to Converge’s improved EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 55.1% or P6.49 billion.

Vukovich also cited the firm’s aggressive expansion in the regions, lowered bandwidth and leased line costs, and the impact of the Corporate Recovery and Tax Incentives for Enterprises law.

Sharing what Converge tells its investors, Vukovich said: “We’re confident that we can further grow the margin, the income. But at this point, we’re not giving out any specific guidance on the margin targets.”

Converge chief executive officer Dennis Anthony Uy also said the listed fiber broadband provider might be able to offer more add-on services. Recently, Converge launched Vision, its entertainment add-on service.

“We will come up [with] more value-added services in the future. We already have a digital highway to individual homes. The more you can connect with the consumer, the more products you can add on. That’s why we are a technology and innovation company,” Uy said.

Asked for updates on the planned partnership with Elon Musk’s SpaceX, Uy told reporters to “just wait” for updates.

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