Converge braces for slower revenue growth in '22 | Inquirer Business

Converge braces for slower revenue growth in ’22

Converge ICT Solutions Inc. expects slower revenue growth this year amid rising consumer prices that can affect the affordability of its services.

Matthias Vukovich, chief financial office advisor at Converge, said in a press briefing on Thursday that they have downgraded their topline growth target to 25-30 percent from the original 50 percent, although it can still be considered a “very solid revenue growth.”

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“While it is lower compared to the hypergrowth … in the past, we are confident to continue to grow the subscriber base,” he added.

Converge chief operations officer Jesus Romero explained that some segments of its market were “prone to certain shocks,” citing the increasing cost of commodities.

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“It’s hard to be overly bullish given the reality of what we see today. There are rising prices for the moment,” Romero said.
In the first half, Converge saw its net income rise by 22 percent to P3.95 billion, driven both by its residential and enterprise markets.

Topline figures of its residential business improved by 38 percent to P14.08 billion while enterprise revenues grew by 26 percent to P1.97 billion in the first half.

The listed company slashed its capital expenditures to P21 billion to P23 billion from the initial P26 billion to P28 billion because of “accelerated network roll-out and driven by further capex efficiencies,” it said in a statement.

As of end-June, the Converge fiber network has reached over 13.5 million homes, which translates to 52.1-percent household coverage. It aims to increase this to 55 percent by next year.

The internet service provider had 1.8 million residential subscribers during the period. By the end of 2022, Converge sees this growing to 2 million.

This year, the company said it plans to have a stronger presence in more major cities in North Luzon, Visayas and Mindanao.

“We will continue to expand as we aim to serve the connectivity needs of our people which we hope will also help aid the country’s economic recovery amid the continued threat of COVID-19 and inflationary pressures due to the unstable external environment,” Converge CEO Dennis Anthony Uy said.

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TAGS: Converge, demand, rising prices
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