Converge ICT H1 profit grows 158% to P3.252B

Fixed broadband internet service provider Converge Information and Communications Technology Solutions Inc. saw its earnings grow more than double in the first half of 2021 on the back of continued strong demand for internet connectivity during the period.

In a regulatory filing on Thursday, Converge ICT reported a net income of P3.252 billion in the first six months of the year, up 158% from P1.259 billion in the same period in 2020.

The strong bottom line growth was driven by continued subscriber take-up as consolidated revenues grew 81.5% to P11.781 billion from P6.49 billion year-on-year.

The revenue increase was driven by 85% jump in subscriber base and 7% uptick in residential average monthly revenue per user.

Converge ICT’s residential subscribers grew to 1,355,079 as of June 30, 2021 from 731,563 as of June 30, 2020.

Likewise, the company’s enterprise revenues grew by 3.8% to P1.569 billion from P1.512 billion a year earlier.

The company said it captured 47% market share of fixed broadband sector.

Apart from the strong revenue stream, Converge ICT also benefited from the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, which effectively reduced the company’s corporate income tax rate to 23%.

The company also cited the completion of the initial phases of its domestic subsea cable network in the Visayas-Mindanao region in the second quarter of last year which resulted in the activation of an end-to-end nationwide backbone reaching from northern Luzon to Mindanao.

Converge ICT said it deployed a record 565,848 new fiber-to-the-home (FTTH) ports during the second quarter of 2021, more than twice the number of FTTH ports deployed during the same quarter in 2020.

As of June 30, 2021, Converge’s nationwide network reached more than 8.3 million homes, on track to reach the company’s target to cover approximately 55% of households in the Philippines by 2025.

At a virtual press briefing, Converge ICT chief financial advisor Matthias Vukovich said the company continues to see “very strong demand for our services.”

“Fiber penetration in the Philippines is still very low at less than 20% compared to peer countries at 40 to 50%. [We] still see a strong potential for fiber not only on the residential side, but also pick out in demand from especially on the enterprise side,” Vukovich said.—AOL, GMA News