ABS-CBN posts P185-M net income in first half, down 67%

PDI

August 12, 2005

ABS-CBN posts P185-M net income in first half, down 67%

 

By JAMES A. LOYOLA

 

ABS-CBN Broadcasting Corporation posted a net income of R185 million in the first half of the year, reversing losses posted in the first quarter, but still 67 percent lower than the R560 million earned in the same period in 2004.

ABS-CBN chief financial officer Randolph Estrellado said the firm’s finances continue to reflect weaker airtime revenues and higher costs due to the impact of a lower ratings performance and a highly competitive environment.

Gross airtime and other broadcasting related revenues reached R5.2 billion, down 6 percent year-on-year as Mega Manila Channel 2 household ratings fell to 14 percent in the first half of 2005 from 16 percent in the same period last year.

For the second quarter this year, gross airtime revenues declined by 5 percent to R2.9 billion. Excluding the political ads that were booked in the same period last year though, gross airtime revenues were up by 6 percent.

On a positive note, net sales sustained its robust growth, up 19 percent, due to strong subscriber growth of ABS-CBN Global, translating to 1.7 million viewers worldwide by end-June 2005. Thus, net revenues went up 2 percent to R6.7 billion.

Operating expenses rose 9 percent to R6.1 billion on the back of higher cash expenses as production cost rose 10 percent to R2.1 billion due to the full year impact of new programming.

ABS-CBN president Luis Alejandro said the third quarter should be better than the second quarter as ratings have already stabilized when compared to ratings in April. He added that July airtime revenues were already higher than the same month last year.

He noted that Channel 2’s Mega Manila audience share for primetime has risen to 38 percent in July from 27 percent in April. Rival GMA-7 continues to lead with a 43 percent audience share.

Alejandro said the firm will continue with its three point program aimed at reducing costs and raising earnings until the end of the year. They will begin to assess the effectiveness of the program in October and decide if further steps are necessary.

The three-point program focuses on raising ratings for primetime which accounts for the bulk of airtime revenues, optimizing production units, and the reduction in general and administrative expenses.