Friday, May 16, 2008 ABC-CBN’s earnings plunges; GMA-7 bares increase in income
LOPEZ-owned ABS-CBN Broadcasting Corp. on Thursday reported that its net income dropped in the first quarter of 2008 due to the expiration of their Direct TV license fee and the absence of political ads.
GMA Network Inc., the rival network of ABS-CBN, meantime announced that it registered a six percent increase in net income to P454 million owing to higher revenues.
In his presentation during the investors and analysts briefing, Charles Gamo, head of the Investors Relations and Corporate Planning of ABS-CBN, said their net income slid by 13.88 percent to P242 million in the first quarter of 2008 from P281 million in the same period last year.
But Gamo explained that comparing the 2008 first quarter recurring income of P242 million to 2007 recurring net income during the same period, the 2008 period is up three percent.
Recurring revenues consists of airtime and direct sales revenues, Gamo said.
Vivian Tin, ABS-CBN chief officer for research and business analysis, attributed the decline in net income to the termination of Direct TV license, the absence of political ads and Holy Week.
But she stressed that the company’s net income grew by 23 percent to P242 million during the period if we will take out the extraordinary gains in the first quarter of 2007, meaning the sales from Direct TV and political ads.
For 2007, Gamo said they recorded P46 million revenues from Direct TV license fee and P38 million from political advertisement.
"These licenses fees were generated from subscribers who migrated to the DirecTV platform and continued to remain subscribers for a given period of time," ABS-CBN said.
Gamo added that from 2005 to 2007, they were able to generate a total of P3.3 billion from Direct TV.
Rolando Valdueza, ABS-CBN chief financial officer, is confident that the second quarter would be better after the company from January to April posted a net income of P409 million compared to the P397 million in the same period last year.
"The second quarter will be much better compared to last year," Valdueza said.
ABS-CBN’s gross revenues jumped by three percent to P4.3 billion during the first quarter of 2008 compared to the same period in 2007 owing to higher airtime revenues and direct sales.
Excluding license fees, ABS-CBN said consolidated revenues grew by five percent year-on-year.
As of end-March, total subscriber base of ABS-CBN Global rose 15 percent, while sale of services went up by seven percent, from P837 million to P895 million.
In addition, ABS-CBN Global's sale of goods skyrocketed to P94 million during the first quarter of 2008, a 70 percent increase over the same period last year.
Total expenses grew by seven percent P3.9 billion in the first quarter of this year.
The GMA Network, on the other hand, said its airtime revenues was up one percent to P2.4 billion in the first quarter of the year, while revenue from international and other sources grew by six percent.
Its gross revenues which includes gross airtime revenue, production and others, increased by two percent or P39 million to P2.56 billion.
"Despite the absence of political ads and early onset of Holy week this year as compared to last year, airtime revenue inched up by one percent to P2.4 billion. Not all political ads amounted to P203 million or roughly nine percent of last year's airtime revenue for the first quarter," GMA Network said.
Likewise, their international operations for the first quarter hit P118 million revenues, up 19 percent compared to P99 million in the same period last year while Pinoy TV registered increased sales as the numbers of its subscribers grew. (MSN/Sunnex)
