Converge ICT solutions Inc. made P10.8 billion in income last year, up 18.8 percent from P9.1 billion in 2023, on revenues of P40.61 billion, the company said in a disclosure to the Philippine Stock Exchange on Monday.
Revenues grew 14.8 percent from P35.36 billion a year earlier.
The company expects capital spending to reach P20 billion to P25 billion this year compared with P9.3 billion actual spending last year.
The company wants to ramp up spending relative to last year’s 3.33 percent increase in capital expenditure (capex). In 2023, Converge spent P9 billion.
Converge intends to invest in international subsea cable systems and two data centers on top of the port expansion and redundancy capex this year.
This is expected to drive the company’s future growth, as it intends to grow its topline by 14 to 16 percent this year.
Peter Louise Garnace, equity research analyst at Unicapital Securities Corp., said Converge is ready to grow more given its extensive fiber networks in the Philippines.
Converge also targets to achieve earnings before interest, taxes, depreciation and amortization (EBITDA) of about 61 percent and a return on invested capital (ROIC) of 16.5 to 17.5 percent this year.
“EBITDA grew 14.2 percent to P24.6Bn billion last year, with margin ending at 60.5 percent for fiscal year 2024,” it said.
Converge closed 2024 with P107.54 billion in total assets, up 6 percent from P101.14 billion a year earlier. Liabilities declined by 6 percent to P52.36 billion from P55.9 billion in 2023.
“The company’s debt service coverage ratio was 2.9x, the net debt-to-total equity was 0.2x, and gross debt-total equity was 0.5x – well within the required financial covenants from debt facilities,” it said.
Last January, Converge secured a Tier 3 design certification for its data center in Caloocan City which is supposed to go online this year. This development confirms the data center complies with industry standards on “maintainability and redundancy.”
Converge offers room for more gains due to its growing subscriber base and expanding free cash flows, stock brokerage BPI Securities Inc., said in a separate investor’s note on Monday.
The Philippines is home to a young population, with a median age of 25 years old and high propensity to use the internet.
