Pamapanga-based businessman Dennis Anthony H. Uy’s Converge ICT Solutions Inc. reaped a profit windfall in the first semester of 2020 as demand for its broadband services surged amid the COVID-19 pandemic.
Its latest investor prospectus showed a net income of P1.26 billion—a jump of over 50 percent—while revenues hit P6.49 billion, up 65 percent as of June 30 this year compared to the same period in 2019.
The gains came just as Converge ICT filed a record P35.9 billion initial public offering (IPO) last July. It plans to complete the offer and listing on the Philippine Stock Exchange within October this year.
In its prospectus, Converge ICT said home broadband subscribers nearly doubled in the first semester. From 381,343 last year, it ended June 2020 with 731,563 subscribers.
The company, which is backed by United States private equity firm Warburg Pincus, said P8.22 billion would be spent on expansion from 2021 to 2022. The rest of the IPO proceeds will go to the company’s shareholders.
Apart from the IPO, Converge is lining up additional financing. It said in its prospectus it tapped two local banks this month to raise P10 billion via 7-year term loans.
As a result, it has commitments from leading banks for about P32.7 billion, enough to cover spending “for the next several years.”
The company will use the funds to extend its dominant share in high-speed home internet, a businesses segment that is vastly underserved in the Philippines.
Converge ICT said unserved demand was estimated at up to $4.2 billion in 2019—4.3 times the market last year in terms of revenues. It estimated demand to hit $6.9 billion in revenue by 2025.
“We believe that the Philippine fixed broadband market is currently at an inflection point, with Converge, in particular, serving as a catalyst for market growth as it continues to lead efforts to address current unserved demand,” Converge ICT said.
The company, which star-ted as a small cable television operator in Pampanga province, is pursing its expansion through the ongoing construction of a nationwide broadband network.