Converge ICT nets P3.4B in 2020, up 78%

Fiber internet service provider Converge ICT Solutions Inc. saw a high double-digit growth in its bottomline in 2020, despite the COVID-19 pandemic, on the back of the company’s subscriber base expansion.

In a disclosure to the Philippine Stock Exchange on Thursday, Converge ICT reported a net income of P3.388 billion, 78% higher than the P1.9 billion posted in 2019.

Its high double-digit earnings growth is due to the 71% consolidated revenues growth at P15.652 billion from P9.139 billion year-on-year, resulting from the 99% increase in its residential business to P12.628 billion from P6.354 billion a year earlier.

Converge ICT’s subscriber base doubled to 1,038,000 residential subscribers as end-2020 from 530,000 as of end-2019.

“As the home became both office and classroom amid the global pandemic, we further accelerated our fiber network rollout to deliver high-speed broadband connectivity to more Filipinos, reaching underserved and unserved areas in the country,” Converge ICT CEO Dennis Anthony Uy  said.

Likewise, the company’s enterprise business saw an increase of 9% to P3.024 billion from P2.786 billion in 2019 due to a net addition of 1,007 customers, representing a 10% year-on-year growth as “Converge saw a pick-up in demand from SME clients and recorded new wholesale contracts with government clients and large international global carriers.”

Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at P8.218 billion, up 76% from P4.665 billion in 2019, with an EBITDA margin of 52.5% higher than 51% margin in the previous year.

In the fourth quarter of 2020 alone, Converge ICT posted a net income of P1.198 billion, up 110% from P570 million in the same period last year on the back of 81% increase in revenues to P4.975 billion from P2.745 billion year-on-year.

For 2021, the company is targeting to grow its subscriber base between 1.6 million and 1.7 million.

“In addition, the Philippines Senate and the House of Representatives ratified the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill in February 2021, which will lower the corporate income tax rate for large corporates from 30% to 25%. We expect that increasing EBITDA margins together with the decrease in our corporate income tax rate, will further increase our Net Income margins in 2021,” it said. —LBG, GMA News