Converge income rises 27% to nearly P2 billion on increased subscriber base
LISTED fiber internet provider Converge ICT Solutions, Inc. saw its first-quarter attributable net income increase by 27% to P1.97 billion from P1.55 billion in the same period a year earlier as a result of higher revenues from residential and enterprise subscribers.
The company’s revenues rose by 40% to P7.75 billion from P5.55 billion in the same period in 2021, its first-quarter report showed.
Revenues from the company’s residential business increased by 42% to P6.81 billion during the period from P4.80 billion previously, driven by a 52.5% year-on-year growth in its subscriber base. It ended the quarter with 1,802,202 residential subscribers.
Enterprise revenues increased by 25% to P935 million in the first three months of the year from P750 million in the same period in 2021.
According to the company, the increase was fueled by robust growth in the small and medium enterprise (SME) segment. Its SME customers rose by 200%, reaching 25,810 as of March 31.
Cost of services went up by 30% to P3.02 billion from P2.33 billion in the first quarter of 2021, resulting in a gross profit of P4.72 billion, which is 47% higher than the P3.22 billion gross profit reported in the same period the previous year.
“Converge has been able to maintain its strong balance sheet and cash flows with ample liquidity and gearing comfortably within bank covenants, as we drew down from available facilities to finance the significant network expansion done during the first quarter of the year,” the company said.
Its net debt position rose from P11.76 billion as of Dec. 2021 to P16.30 billion as of March 2022.
“The company availed of a total of P4.96 billion in new debt in 1Q2022 offset by repayments and amortizations amounting to P486 million,” it noted.
“The company’s debt service coverage ratio was 6.1x and the gross debt position as a percentage of total equity was 0.7x, well above the required financial covenants from its debt facilities.”
Its total undrawn debt facilities amounted to P26.5 billion as of March 31, 2022.
Last week, the company announced that it was added in the MSCI Global Standard Indexes, an international equity index which tracks stocks across 33 markets.
Converge said the latest additions will take effect on May 31 this year.
“Our inclusion in the global benchmark, the MSCI, is yet another testament to our strong market position. We’re pleased to have joined another index that will further broaden our exposure to international passive investors,” said Maria Grace Y. Uy, president, chief resource officer, and chief risk officer of the company.
Converge ICT shares closed 0.18% higher at P27.80 apiece on Monday. — Arjay L. Balinbin