Converge Considers Capital Expenditure Fundraising

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Fiber broadband provider Converge ICT Solutions Inc. plans to raise additional debt by the second half of the year to fund its capital expenditure (capex) of 28 billion pesos.

Matthias Vukovich, chief adviser to Converge’s finance office, said in a virtual financial briefing that the company had earmarked 26-28 billion pesos for capital expenditures this year, which would be funded by a combination of cash flow from operations and additional debt.

“We are well covered by second half of the year, but we will probably raise additional debts in the second half of the year. This could be in the facility tapped out of remaining P10 billion conservation, or pulled down from our banks. We have attractive conditions at both ends,” Vukovich said.

“The existing debts we have are almost 90% fixed in nature with a three to five year term loan, so even in a rising interest rate environment it won’t have an impact. on our existing debts. At this stage, we are not looking to prepay our existing debts,” he added.

In the first quarter, Converge spent 4.3 billion pesos on capital expenditure, less than the 5.3 billion pesos spent in the same period last year.

Converge reported net profit after tax of 1.97 billion pesos in the first quarter of the year, up from 1.549 billion pesos a year ago, thanks to continued growth in its residential and business activities. ‘business.

Converge increased its revenue by 40% to 7.75 billion pesos in the first three months compared to the same period last year, thanks to the continued strong increase in its residential subscribers and the acceleration of the demand from client companies.

Converge revealed it saw gross subscriber additions of 188,000 in the quarter, up 15% from the last quarter of 2021, leading to a cumulative subscriber count of 1.8 million, higher 53% compared to its level of the previous year.

Its base net income reached nearly 2 billion pesos in the first quarter, representing a base net income margin of 25%.

“We are seeing solid growth in our finances in the first quarter of 2022 and expect to meet our full year targets as we remain aggressive in our network deployment and marketing activities in both the residential and business segments. “, said Dennis Anthony Uy. , CEO and co-founder of Converge.

National household coverage in the first quarter was 47%, the company said. In terms of past homes, 12.2 million homes in the Philippines are served by Converge, which is 70% more than the same period in 2021.

Despite its massive network investments, Converge said it has maintained an industry-leading return on investment of 17%, thanks to its disciplined approach to deploying capital to expand its fiber network and tracking key capital efficiency indicators such as port utilization rates.

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