Converge trims 2026 targets as H1 profit dips to P5.5B

MANILA, Philippines — Converge ICT Solutions Inc. saw its bottom line slip by nearly 7 percent to P5.5 billion in the first half, even as revenues inched up, prompting the firm to temper its full-year outlook amid “persistent inflationary pressures.”

First-half profit fell 6.78 percent from P5.9 billion a year earlier, although Converge maintained a net income margin of 24.4 percent.

READ: Households boost Converge bottom line by 18%

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In a disclosure Tuesday, the Dennis Anthony Uy-led company said consolidated revenues rose 3.1 percent to P22.4 billion from P21.8 billion last year.

Residential revenues reached P18.5 billion in the first half, with total subscribers at 3.09 million as of end-June. Meanwhile, the enterprise segment posted stronger growth, with revenues jumping 15.1 percent to P3.9 billion from P3.4 billion.

Earnings before interest, taxes, depreciation and amortization (Ebitda) reached P13.3 billion, translating to a margin of 59.1 percent, still within the company’s full-year target.

However, amid “persistent inflationary pressures” since the second quarter and other near-term macroeconomic headwinds, Converge said it is recalibrating some of its targets for the rest of the year.

Recalibrated targets

After earlier projecting revenue growth of around 10 percent in 2026, Converge ICT Solutions Inc. cut its full-year target to 4 percent to 6 percent.

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It also trimmed its capital spending outlook to P17 billion to P20 billion from as much as P23 billion, previously earmarked to fund nearly 1 million additional ports, mainly in the Visayas and Mindanao. So far, Converge has spent P5.7 billion in capital expenditures in the first half.

Even with the lower outlook, the company expects to maintain its Ebitda margin at 58 percent to 59 percent and keep its return on invested capital target at 15.5 percent to 16.5 percent. Meanwhile, net debt stood at P15.6 billion as of end-June.

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Despite a challenging macroeconomic backdrop, Converge said it remains “operationally resilient,” citing improvements in network performance and customer service metrics in the first half.

“Converge has always been focused on delivering the best quality service to its customers,” Uy said. “Our upload speed reached a six-month high, while our network delivered best-in-class latency, reflecting the continuous investments we have made to improve customer experience.” /pai