Converge Information and Communications Technology Solutions Inc. said Wednesday net income in the first half rose 24 percent to P5.3 billion as the Philippines’ only pure-play high-speed fixed broadband operator continued to expand its subscriber base on the back of steady demand for its various services.
The listed fiber broadband service provider ended June with 2.35 million subscribers, with 2.16 million postpaid customers. It reported a net addition of 223,751 subscribers as demand for its core product, FiberX, along with its new brands BIDA Fiber and Surf2Sawa, remained strong.
Converge saw significant growth in its residential and enterprise segments, pushing consolidated revenues 12.4 percent higher to P19.5 billion. The residential business grew 12 percent to P16.6 billion with the connection of new customers while the enterprise segment revenue rose by 16 percent to P2.9 billion on the heady growth of connections of small and medium enterprises.
Given the strong performance in the first half of the year, Converge upgraded its full-year targets.
It now expects consolidated revenue growth of 12-14 percent, up from the previous 7-8 percent estimate. Profitability margins have also surpassed initial targets, leading to an updated earnings before interest, taxes, depreciation and amortization margin guidance of 59-60 percent, up from 58-59 percent. The target return on invested capital has been raised to 16-17 percent from the previous 15-16 percent.
Cash capital expenditures for the year are expected to range between P15-17 billion.
Converge’s EBITDA grew by 18.3 percent to P11.9 billion while ROIC in the first half was at 17.3 percent, down slightly from 17.4 percent.
Converge also improved its balance sheet, with net debt decreasing to P15.8 billion at the end of June from P20.1 billion at the end of March. The company repaid a portion of its debt, reducing the balance to P32.8 billion, which slightly lowered the finance cost in the second quarter.
“In the age of shifting market conditions where cybersecurity is a critical focus for businesses, digital resilience is fundamental for companies to adapt and swiftly deal with disruptions. Converge DRaaS is the reliable, hassle-free, affordable, and flexible support our enterprise clients can leverage to bolster their resilience capabilities,” said Jesus Romero, Converge senior executive vice president and chief operations officer.
“What we’re seeing is a changing of the guard in the industry, which comes as no surprise given our significant investments in our fiber network. In the end, service excellence through innovation and technology has prevailed,” said Converge president and co-founder Grace Uy.
