Broadcaster GMA Network, Inc. (GMA) reported strong financial results for the third quarter owing to increased advertising sales across its major revenue platforms.
Consolidated gross revenues for the third quarter of 2012 reached P3.822 billion, reflecting a 13-percent growth from P3.384 billion a year earlier, while net income rose 9 percent to P573 million from P525 million.
The increase in Q3 earnings was driven mainly by the substantial growth in airtime revenues, up by 14 percent or P443 million to P3.537 billion year-on-year.
This brought the company’s total gross revenues in the first nine months P10.612 billion, an increase of 5 percent or equivalent to at least half-a-billion pesos year-on-year.
GMA’s airtime revenues grew 5 percent to P9.739 billion from P9.253 billion.
Flagship Channel 7 posted a 5 percent increase in airtime sales, while leading local news channel GMA News TV grew its advertising revenues by 24 percent.
Regional TV, on account of its aggressive expansion efforts, also improved its revenues from national and local sales by 24 percent. Radio, on the other hand, increased its earnings and surpassed last year’s solid performance by 4 percent.
GMA chairman and CEO Atty. Felipe L. Gozon said management is pleased with the company’s third quarter financial performance, and expects sustained revenue growth as political ads are expected to come on stream in the last quarter.
“Given the third quarter figures, we are optimistic that the fourth quarter will bring even better financial results as we expect political ads to further boost our earnings for the year,” Gozon said.
In a press conference on Wednesday, Gozon explained that political candidates are realizing the importance of political advertisements in television, citing that the Philippines has about 94 percent television penetration rate.
“I think the candidates realize that television is a very penetrating and important promotional aspect of their candidacy. Even now, before campaign period starts, more knowledgeable candidates are utilizing their political advocacies,” he said.
For his part, GMA president and chief operating officer Gilberto Duavit, Jr. disclosed that the television giant is expecting about P2.3 billion in net income for this year—a leap from last year’s P1.7 billion net income.
“We are very, very optimistic [for 2013] which is an election year. The revenues in May from the political revenues will be approximating that of 2010,” Gozon added.
GMA’s CEO added that the company also expects to exceed this year's target net income in 2013.
Meanwhile, revenues from other sources for the nine-month period factored in an additional P873 million, up 2 percent or P17 million from a year earlier.
GMA New Media, Inc.’s recently formed techno-creative unit Digify Inc. generated more than half of the net increase in this revenue category.
The subscriber uptake of GMA’s flagship international channel, GMA Pinoy TV, remained on the uptrend at 320,000 (or an estimated 2.1 million), 12 percent higher year on year. GLTV, on the other hand, registered 121,000 (or an estimated 1.1 million) subscribers, up 1 percent from last year.
During the third quarter, GMA News TV International was launched in du Mobile (UAE), Maxxi (Malaysia mobile), and Digi (Malaysia mobile).
Subscription and advertising revenues of GMA International, however, dipped by 2 percent to P705 million from the previous year’s P719 million due to the appreciation of the peso.
Meanwhile, GMA Worldwide Inc., the Network’s content acquisition and distribution subsidiary, generated $318,300 in the third quarter as it sold over 50 locally produced programs and movies to various countries namely USA, Kenya, Tanzania, Singapore, Vietnam, Hong Kong, Thailand, Indonesia, Malaysia, Cambodia, Brunei, and Myanmar.
GMA Records also successfully launched the self-titled album of Julie Anne San Jose reaching Gold status 3 weeks after its August 15 release. The album also clinched the No. 1 spot on iTunes hours after its August 10 release, and entered the charts in Singapore, Thailand, Malaysia, Hong Kong, Macau and Taiwan.
GMA managed its total operating expenses over the nine-month period to a low single-digit growth of only 4 percent or P258 million from same period last year. This is despite the increase in depreciation expense attuned with the roll-out of the state-of-the-art Media Asset Management System (MAMS) late last year as well as the launch of two multi-million originating stations in Ilocos and Naga middle of this year. Amortization of program rights likewise soared as a factor of programming mix. Aside from these, increased manpower headcount and payout of the one-time signing bonus for rank and file employees and appreciation bonus for confidential employees contributed to this year’s rise in total operating costs.
Nonetheless, given the spike in the topline, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for the said period stood strongly at P3.040 billion, reaching a double-digit increase of 12 percent or P323 million year on year, while net income after tax settled at P1.587 billion or P7 million higher than last year.
GMA Network likewise maintained its overall advantage in NUTAM ratings in Q3 2012 with an average total day household audience share of 33.8 percent, ahead of ABS-CBN’s 32.6 percent average by 1.2 points, and TV5’s 15.1 percent by 18.7 points, according to Nielsen TV Audience Measurement data.
GMA remained unrivaled and led across all dayparts in the viewer-rich areas of Mega Manila and Urban Luzon, which accounted for 59.5 and 77 percent, respectively, of total urban television households in the entire country.
In Mega Manila, GMA garnered 38.7 percent in total day household audience shares, 12.2 points higher than ABS-CBN’s 26.5 percent and 23.5 points ahead of TV5’s 15.2 percent. Similarly, GMA continued to lead in Urban Luzon with an average of 37.7 percent up by 9.4 points from ABS-CBN’s 28.3 percent and by 23.2 points from TV5’s 14.5 percent.
GMA kept its lead in nationwide ratings in October (October 28 to 31 based on overnight data) with an average total day household audience share of 33.3 percent, higher by 0.2-point over ABS-CBN’s 33.1 and by 17.4 points over TV5’s 15.9 percent.
GMA likewise ruled in Mega Manila in the said month with 38.4 percent, 11.5 points ahead of ABS-CBN’s 26.9 points and 22.3 points ahead of TV5’s 16.1 percent. In Urban Luzon, GMA scored 37.4 percent, up 8.6 points from ABS-CBN’s 28.8 points and up 22.0 points from TV5’s 15.4 percent.
GMA subscribes to Nielsen TV Audience Measurement along with 22 other paying subscribers including another local major television network (TV5), Faulkner Media, CBN Asia, 15 advertising agencies, and 4 regional clients.
In Mega Manila, Nielsen has a sample size of 1,190 homes versus Kantar Media's 770 homes. Nationwide, Nielsen has a sample size of 2,000 homes compared to the lower sample size of 1,370 utilized by Kantar Media.
GMA not for sale
At the press conference, the GMA's CEO reiterated that the television giant is not for sale.
“We do not go around selling GMA to anybody. We are happy the way we are… We are not looking for buyers. There is no reason for us to sell the company,” Gozon told reporters.
Recently, talks between GMA and tycoon Manuel “Manny” V. Pangilinan stalled.
“We terminated the discussion full stop. The end,” Gozon said. “Any revival [of the talks] will not come from us.”
Still, he noted that they are not closing their doors to interested buyers. “If somebody is interested [and] offer a price we cannot refuse, [then] we will entertain.”
“But we are not mayabang and arrogant. If tomorrow and MVP comes back and offer a better price we will entertain that,” he added.— ODG/VS/BM, GMA News