Households boost Converge bottom line by 18%

Converge ICT Solutions Inc. registered an 18-percent surge in net income during the first quarter. This was attributed to stronger residential and enterprise business, along with higher fiber port utilization.

In a disclosure on Thursday, the listed fiber service provider reported that its bottom line during the first three months jumped to P3.02 billion from P2.55 billion a year ago.

This was supported by total revenues rising by 13 percent to P10.8 billion for the period.

Most of the top line was contributed by the residential segment, revenues of which climbed by 12 percent to P9.12 billion.

As of end-March, Converge has 2.7 million residential subscribers, up 20 percent from a year ago. Some 2.3 million are postpaid customers while the remaining 361,128 are prepaid subscribers.

Converge’s household coverage also rose to 64.46 percent from 63.54 percent.

Enterprise revenues, meanwhile, improved by 23 percent to P1.69 billion.

Fiber port utilization stood at 34.4 percent as of end-March, higher than 26.9 percent from the previous year.

Converge said it has about 5.4 million fiber ports yet to be deployed, which it can use to further expand its presence.

In the first quarter, Converge spent P2.6 billion to deploy 35,000 fiber ports and over 60 kilometers of fiber backbone and to fund other expansion projects.

See Also

Security Bank closes acquisition of Home Credit stake

The company has set a capital expenditure guidance of P20 billion to P25 billion this year. This is for projects like international undersea cable systems, data centers and port deployment.

Converge chief finance officer Robert Yu said their capex has been “fully budgeted” with internally generated funding. Yu said the company has P18 billion in cash. However, he said the company may raise funds by borrowing, depending on the market conditions.

Last March, Converge announced it had entered into a partnership with tech tycoon Elon Musk’s Starlink to sell the latter’s product in the country. As an authorized reseller, it also offers installation, network management, monitoring and maintenance services.

The company earlier said it has about $3 million to $4 million worth of inventory comprising “thousands” of Starlink kits. This new revenue stream is estimated to contribute 5 percent to 10 percent growth in the top line figures of its enterprise business.