GMA-7 ends 2012 with P1.6-B profit, down 5%

MANILA, Philippines – GMA Network Inc., the country’s second biggest media firm, reported a P1.617 billion net income in 2012, 5% lower than a year ago and far less than the P2.3 billion goal for the year.

This is, however, just a slim P91 million below the P1.7 billion that the country’s biggest media group and GMA’s rival, ABS-CBN Corp, earned in 2012. ABS-CBN’s income reflected a 29% decline largely due to the absence of one-time gains from its cable unit, SkyCable.

Noteworthy is the 70% drop in GMA-7’s net income in the 4th quarter alone. Net income plunged to P30 million from P144 million in the same quarter in 2011 as operating expenses jumped 15.1% to P2.806 billion from P2.438 billion.

In a statement on Friday, March 22, GMA Network, the operator of GMA-7, said consolidated gross revenues reached P13.929 billion, up 6%.

Airtime sales, which account for 91% of total revenues, reached P12.703 billion, a 7% increase.

However, operating expenses increased 7% to P9.593 billion largely due to higher amortization of program rights that are part of diversification efforts.

The following resulted in the 10% decline in earning before interest, taxes, depreciation and amortization (EBITDA) to P3.397 billion: 

• rise in depreciation charges related to its media asset management system, investments in the launch of its Ilocos and Bicol originating stations
• P185 million worth of extraordinary bonuses, a 12% increase
• increase in total headcount 

GMA Chairman and CEO Felipe Gozon said he expects 2013 to be a better year due to strong performance in the early months and because this is an election year.

“The first two months have been exceptionally strong with GMA Channel 7 hitting an all time high in February alone,” Gozon said, citing a 7% increase in incremental sales.

This was supported by a 25% increase in its regional TV business unit. Airtime revenues from radio dropped 3%. – Rappler.com