Converge ICT Solutions, Inc. Registered Consolidated Revenues of P19.5 Billion for H1-2024

The Philippines’ only pure-play high-speed fixed broadband operator, Converge Information and Communications Technology Solutions, Inc. (Converge) ended June 2024 with a total of 2,351,803 subscribers. This is comprised of 2,159,284 postpaid subscribers and 192,519 prepaid subscribers. The H1-2024 net adds of 223,751 shows continuous demand for core product FiberX, as well as the new brands BIDA Fiber and Surf2Sawa.

Converge's consolidated revenues grew by 12.4% in H1-2024 to P19.5 billion from P17.4 billion in H1-2023, reenforcing the company’s position as the fastest-growing fixed broadband service provider in the Philippines.
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Residential business grew to P16.6 billion during the same period, representing 11.8% YoY growth. FiberX has seen a steady demand growth from H1-2023 with an 18.8% increase in gross additions and 83.3% increase in net additions. BIDA Fiber and Surf2Sawa continued to register all-time-high quarterly gross adds – a testament to the intact and growing demand for fiber broadband across all income segments. BIDA Fiber and Surf2Sawa now represent 5% of residential revenue and more than 13% of total residential subscriber base. Consolidated subscriber base reached 2,351,803 as of June 2024.

In 1H2024, enterprise revenue grew by 16.0% year-on-year to P2.9 billion from P2.5 billion in H1-2023. Small and medium enterprise (SME) continued to be the fastest growing subsegment with 29.5% revenue growth.

The company’s EBITDA grew by double-digits at 18.3% to P11.9 billion in H1-2024 from P10.1 billion in H1-2023. Consolidated EBITDA margin improved to 60.9% in H1-2024 compared to 57.9% during the same period last year. Provision for impairment of trade and other receivables significantly improved to 3.9% cost margin due to improved efficiency and effectivity in collection. 

The company maintained its industry-leading Return on Invested Capital (ROIC) at 17.3% from 17.4% last quarter. This performance is a result of the Company’s disciplined approach in deploying capital to expand its fiber network and improve its overall services.

Net income after tax grew by 23.6% from P4.3 billion in H1-2023 to P5.3 billion in H1-2024, resulting in a net income margin of 27.1% for H1-2024, higher than H1-2023 net income margin of 24.7%.

Converge has been able to maintain its strong balance sheet and cash flows with ample liquidity and gearing comfortably within bank covenants. The company’s net debt position (as measured by total financial debt less cash and cash equivalents) decreased from P20.1 billion as of March 31, 2024 to P15.8 billion as of June 30, 2024. The company repaid a portion of its financial debt, reducing the balance to P32.8 billion. This slightly reduced the finance cost incurred in Q22024. The Company’s debt service coverage ratio (DSCR) was 3.4x, the net debt-to-total equity was at 0.4x, and gross debt-total equity was at 0.6x – well within the required financial covenants from its debt facilities. 

Total cash CAPEX as of H12024 amounted to P4.7 billion. 

With the first six months significantly outperforming expectations, Converge has upgraded its full year 2024 targets. From 7-8% consolidated revenue growth, Converge now expects to grow top-line revenue by 12-14% with BIDA Fiber and Surf2Sawa continuing their growth trajectory and FiberX exceeding targets. 

Profitability margins also outpaced targets – pushing our EBITDA margin guidance to a range of 59%- 60% from 58-59%. ROIC target will also be upgraded to 16-17% from 15-16% declared previously. Cash CAPEX for the year is expected to range between P15-17 billion.