ABS-CBN 2012 profit falls 29% to P1.7-B

MANILA, Philippines (UPDATED) – The consolidated net income of ABS-CBN Corp., the country’s biggest media conglomerate, fell 29% in 2012 to P1.708 billion from P2.42 billion in 2011.

In a media briefing on Thursday, March 21, the Lopez-owned company said the decline was due to the absence of a one-time gain. In 2011, ABS-CBN booked additional income from the sale of part of its stake in cable unit Skycable Corp.

Taking this gain out, ABS-CBN’s 2012 core net income rose 23% to P1.032 billion.

The company’s consolidated revenues meanwhile grew 13% to P31.7 billion in 2012, owing to strong advertising revenues and consumer sales.

Ad revenues grew 8% to P19.1 billion, while consumer sales jumped 19% to P12.7 billion.

Total operating and other expenses increased 12% to P26.2 billion brought about by increases in production costs, cost of sales and services, and general and administrative expenses.

2013 outlook

ABS-CBN sees better earnings for 2013, an election year.

This is despite a projected decrease in political advertisements following the Commission on Election’s rule that limits candidates’ ads on all television and radio stations to 120 minutes. In the 2004 and 2010 elections, candidates were given 120 minutes airtime per station.

ABS-CBN CFO Rolando Valdueza said the decrease would be offset by growth in regular ad spending.

“If you look at the first 3 months of 2013, [earnings are] significantly better than the last quarter of last year and the same period of 2012,” Valdueza said. “[Earnings are] being driven by the growth in regular ad spending,” he said.

However, he said they would know the extent of the Comelec rule’s impact only by April. “We expect [pol] ads to come in by April next month right after Holy Week.”

Capital expenditures

Valdueza said ABS-CBN allotted P5 billion for capital expenditures in 2013, higher than the P4.9 billion in 2012.

The budget will be spent for equipment replacement, transmission facilities, and film and program rights acquisitions, among others.

The executive said the capex includes P2 billion for the operations of SkyCable.

He noted the capex would be funded through internal cash. “We continue to assess and weigh our options with regards to our fund raising activities,” he said. – Rappler.com