PROFITS OF listed ABS-CBN Corp. fell by 25% in 2011 from the year previous as the absence of political advertisements slashed the company’s revenues, the broadcaster said in a statement on Friday.
The Lopez-led firm booked P2.4 billion in consolidated net income last year, lower than the P3.2 billion it earned in 2010, which was an election year.
The 2011 profits include the P1.1-billion, one-time gain from the sale of the broadcaster’s 40% stake in Sky Cable Philippine Depository Receipts to Singaporean STT Communications Ltd., Rolando P. Valdueza, the company’s chief financial officer, said in a briefing.
"Without the one-time gain, our profits were at P1.3 billion," he said.
Consolidated revenues stood at P28.2 billion last year, down by 13% from P32.2 billion due to weaker advertising spending of politicians as well as corporations. Advertising revenues went down by 19% to P17.6 billion due to the absence of political advertisements.
Consumer sales increased by 1% to P10.6 billion while revenues from Sky Cable grew by 10% to P4.3 billion.
Total operating expenses dropped by 5% to P22.3 billion on the back of lower cost of sales and general and administrative expenses.
The company, meanwhile, is looking to book P1.3 billion this year, similar to last year’s profits, excluding the one-time gain from the Sky Cable sale.
"But we are confident that we will exceed that target," Mr. Valdueza told reporters in an interview on Friday.
The company has programmed around P5 billion in capital expenditure for 2012, 25% higher than last year’s P4.2 million.
"The bulk of it will be spent on the expansion of Sky Cable, including the acquisition of film rights and upgrade of production equipment," Mr. Valdueza said.
Rival GMA Network, Inc. similarly posted a profit drop for 2011. The company ended the previous year with P1.715 billion net income after tax, down by 39.01% from P2.812 billion recorded in 2010. Its profit guidance for 2012, meanwhile, has been pegged at P2.8 billion on the back of expected recovery in the advertiser spending.
Shares of ABS-CBN slid by 0.25% to P39.90 apiece while share GMA Network shares fell by 2.20% to P8.45 apiece when the stock market closed on Friday. -- Cliff Harvey C. Venzon