Converge earnings hit P7.4B

CONVERGE Information and Communications Technology Solutions Inc.’s net income inched up to P7.4 billion last year from 7.16 billion in 2021, the firm reported on Thursday.

“I think it is just the simple matter of how fast [we grew] and how big we are now,” Converge cofounder and Chief Executive Officer Dennis Anthony Uy said.

“So now that we are almost around P34 billion in revenue, we are happy that we grew this fast. But once you are big, the percentage growth rates would be lower,” he added.

The firm’s consolidated revenues grew by 27.3 percent to P33.70 billion from P26.48 billion, in line with a growth guidance of 25-30 percent.

Revenues from the residential business grew by 27.4 percent to P29.46 billion, driven by an 11-percent growth in its subscriber base to 1,877,361.

The monthly residential churn rate was said to have continued to decrease in the last quarter to 1.75 percent following an all-time high of 2.49 percent in the second quarter of 2022.

Enterprise revenues, meanwhile, grew by 26.4 percent to P4.23 billion, mostly driven from the strong revenue growth in the small and medium enterprise and wholesale segments.

The SME segment continued to lead with yearon-year revenues jumping by 91.4 percent, followed by the wholesale segment increasing by 27.8 percent in the same period. Revenues from large enterprise customers grew by 14.4 percent.

Actual figures were not detailed.

With capital expenditures (capex) of P21.90 billion, return on invested capital was said to have been maintained at industry leading levels.

Depreciation and amortization, meanwhile, increased by 60.4 percent to P6.56 billion.

“For 2023, we expect to spend around P12-15 billion in capex, lower than in 2022,” Converge Deputy Chief Finance Officer Christine Renee Blabagno said.

The spending will focus on key expansion areas in the Visayas and Mindanao. Other key initiatives include investments into international subsea cable and the acquisition of core network equipment.

Converge’s share price went down by 88 centavos on Thursday to P14.12.