GMA-7 to cover P1-B capex in 2013 with internal funds

MANILA, Philippines – GMA Network Inc. (GMA), which operates GMA-7, will depend on internally generated funds instead of borrowings to finance its estimated P1 billion capital expenditure program for 2013.

“There appears no need for a fund raising activity relating to that,” Gilberto Duavit, Jr., president of the country’s second biggest media firm, told reporters when asked during a recent briefing if it will tap the debt or capital markets to fund its capex. 

“Traditionally, our capex are funded through internally generated funds,” he added. 

The capex budget will involve mainly the setting up new regional stations that specialize in localized content, as well as the widening of the company’s reach in rural areas where close to half of all television viewers reside.

Of the amount, over P100 million will be spend on equipment for its elections coverage.

The company’s 2012 capex was at P956 million, a 6.7% increase from a year ago. It covered investments in a media asset management system and in the launch of its Ilocos and Bicol originating stations. 

Duavit said they expect to spend a similar amount this 2013. 

Election year

Felipe L. Gozon, GMA chairman and chief executive officer, earlier said that the company expects higher earnings for 2013 due to the elections and the country’s strong economic performance. He said political ads account only for about 8% to 9% of reveunes, while recurring advertisers are increasing their ad placements due to the overall economy’s strong prospects.

“For 2013, GMA IS expected to deliver better financial results as evidenced by its strong financial performance at the opening of the year,” Gozon said.

GMA’s gross sales rose by 35% in March. The uptick follows strong sales during January and February. During the 2 months, gross sales grew by 32%. 

It expects higher earnings for 2013 because of strong advertising revenue. GMA missed its income target in 2012 largely due to bonus payments to employees and higher operating costs.

GMA-7 posted a 6% jump in revenue to P13.93 billion in 2012. The growth was driven by a 7% increase in airtimes revenue to P12.7 billion from P11.88 billion.

The revenue increase was partly due to the company’s Regional TV unit, which grew by 25% due to expansion and improvement efforts nationwide. GMA International, which distributes the network’s international channels, boosted subscriber uptake of its flagship channel GMA Pinoy TV (GPTV) and lifestyle channel GMA Life TV (GLTV). The 2 stations grew by 13% and 9% respectively.

GMA-7’s net income dropped by 5% to P1.617 billion in 2012. It attributed the weak numbers to higher expenses in the 4th quarter because of payment of bonuses. The company’s net income decreased by 70%

The company reported yesterday that its net income slipped 5% to P1.617 billion last year from P1.705 billion in 2011 due to a weak 4th quarter. The company net income decreased by 70% to P30 million due to its payment of employee bonuses. – Rappler.com