IPVG profit surges to P296.72M in first half

MANILA, Philippines - Information technology conglomerate IPVG Corp. said its profit skyrocketed to P296.72 million in the first half as against a meager P10.18 million in the same period in 2010, aided by strong growth in its major business units as well gains from a recent divestment.

In a financial report filed with the Philippine Stock Exchange, IPVG said its online gaming unit IP E-Games and data center subsidiary IPVG Converge Data Center Inc. posted strong performances, with net earnings surging 8,480 percent and 60 percent, respectively.

IPVG said consolidated revenue went up 3.1 percent to P650.28 million.

During the period under review, IPVG sold 69 percent of the outstanding capital stock of network security firm Prolexic Technologies Inc. to Kennet Partners based on a valuation of $20 million.

Prolexic is a US firm that offers network security services against distributed denial of service attacks while Kennet is an international growth equity investment firm.

IP E-Games posted net earnings of P36.32 million from January to June this year, significantly higher than the P420,000 reported in the same period last year. Revenues more than doubled to P198.21 million while EBITDA jumped 460 percent to P62.34 million.

IP E-Games’ strong performance was attributed to sustained growth from game publishing and the consolidation of Netopia, the largest chain of Internet cafes in the country.

In the past 10 years, Internet growth in the Philippines has shot up 1,385 percent with the number of users estimated at 29.7 million in 2010.

“With this critical mass of Internet users, this represents one of the largest segments of consumer groups in the country. Our company aims to become the leading and largest Internet retailer in the Philippines… We are looking to reinvest in this industry. While we have our work cut out for us, we expect great things to happen in the next two years,” said Enrique Gonzalez, chief executive officer of IP E-Games.

On the other hand, net earnings of IP Converge Data Center amounted to P33.5 million from only P20.95 million. Revenues also rose to P259.42 million as against P24 million.

Currently, IP-Converge’s main data center in RCBC Plaza Makati is operating at full capacity. Its second data center located in Bonifacio Global City, Taguig will be online this September.

“We are very pleased with our groupwide first-half results. The financial performance of the group is the true validation of the success of our strategy and execution. We will continue to work towards sustaining this success through the second half, and the years to follow. Our improved balance sheet, reduction in debt, and increase in cash levels all serve to position the group for new opportunities and continued expansion,” Gonzalez said.

In July, IPVG shareholders approved the company’s restructuring plan, which involves the creation of a new company with the same shareholding structure as IPVG. The newco, which will be a private company, will hold all the assets and liabilities of IPVG.

Shares in newco will be donated to the minority shareholders in the same proportion as their stakes in IPVG.