Converge 2020 revenues up 71% to P9B

Published March 11, 2021, 5:52 PM

by Emmie V. Abadilla

Riding on fiscal year 2020’s strong subscriber growth, pure-play high-speed fixed broadband operator, Converge Information and Communications Technology Solutions, Inc., hauled in P9.14 billion revenues, up 71 per cent from the preceding year’s P9.14 billion.

The company’s net income also grew to P3.39 billion from P1.9 billion in the same period.

Converge doubled its 2020 subscriber base, reaching 1,038,000 residential subscribers by year-end. Significantly, 90 per cent of these were first-time broadband users.

Correspondingly, the company deployed 1.5 million new fiber-to-the-home (FTTH) ports, almost double the number in 2019.

Overall, Converge’s nationwide network reached over 6.1 million homes, on track to reach its target to cover 55% of households nationwide by 2025.

“There’s a massive pent-up demand for FTTH. We’ve not even reached 10 percent penetration. The market is blue ocean,” was how CEO and Co-founder Dennis Anthony H. Uy described it during today’s ( March 11) virtual press briefing.

“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,” he noted.

Hence, despite the pandemic, Converge invested aggressively, putting in P16 BIllion, and intends to invest P20 Billion this year, the CEO disclosed.

The bulk, 50 percent of the 2021 capex will be for its access network, 30 percent will be for building its backbone and the 20 percent balance, for other IT expenses, according to Chief Operating Officer Jesus C. Romero.

Last year, Converge achieved an EBITDA of P8.22 Billion, up 76 percent, reflecting its revenue growth coupled with prudent management of direct costs, including its international bandwidth and leased line costs, along with indirect costs such as general and administrative expenses.

Converge’s Return on Invested Capital (ROIC) was 20 percent, as a result of its disciplined approach in deploying capital to expand its fiber network, and tracking key capital efficiency indicators such as port utilization ratios.

Converge’s balance sheet and cash flows remain strong with ample liquidity and gearing comfortably within bank covenants.

After its October 2020 IPO, which raised P7.83 Billion, Converge is in a net cash position of P1.64 Billion as of year-end 2020.

The company continued to accelerate the nationwide rollout of its leading fiber network throughout 2020, installing more than 28,300 kilometers of fiber optic cables, expanding its backbone and distribution network by 106 percent.

“We have always been focused on giving our customers the best possible experience,” according to Converge President and Chief Resources Officer Grace Uy.

This year, the company continues to focus on capital efficiency as it rolls out its end-end fiber network.

“Converge has built a fiber network that’s ready to serve the expected sustained demand for quality high-speed broadband. Our dream is to provide the majority of Filipinos with world-class internet services through our fiber network,” CEO Dennis Uy concluded.