Listed GMA Network Inc. on Wednesday announced its first quarter net income grew 55 percent to P603 million, up from P388 million a year earlier.
Consolidated revenues increased by 24 percent to P3.241 billion from P3.002 billion in the same comparable period.
Airtime revenues totaled P2.95 billion, up 26 percent from last year, driven mostly by recurring advertisements and than by political advocacies and advertisements.
“Such improvements validate our forecast that 2013 will be a particularly strong year for GMA,” said chairman and CEO Felipe L. Gozon. “Our sales continue to grow at a steady pace and we look forward to the future with optimism,” he added.
Earlier this year, Gozon announced that gross sales reached P1.180 billion as of March 21, surpassing the P1.097 billion registered a year earlier.
2013 'a moving target'
In a briefing at GMA Network Center in Quezon City, Gozon noted the target for 2013 is "a moving target. We might be missing our target, we might be exceeding it," he added.
GMA president and COO Gilberto R. Duavit Jr. explained that they would like to see "a normalization of revenues" first before disclosing the full-year target.
"The preference is to look at the recurring revenues as the reference rather than the extraordinary spike that is observed during the midterm elections," he said.
“But suffice to say that even the political advertisement assumptions were stripped out, we we are targeting substantial growth from previous year," Duavit added.
Recurring airtime revenues went up 14 percent to P2.673 billion and which accounted for 90 percent of the total. Meanwhile, political advertisements accounted for 10 percent or P278 million of the total.
Core business unit GMA Channel 7, which accounted for 85 percent of total airtime revenues, grew earnings by 26 percent.
Regional TV expanded by a robust 85 percent, following its continued expansion, while sales of GMA Radio surged 27 percent as DzBB and LSFM maintained their competitive position nationwide and in Mega Manila.
Channel 11, carrying the country’s No. 1 news channel GMA News TV (News TV), registered flat growth in airtime revenues.
Revenues of GMA International, which manages the operations and distribution of the Network’s international channels, improved by 7 percent. Growth was fueled by advertising placements and single digit growth in subscribers for GMA Pinoy TV and GMA Life.
It recently relaunched its broadcast services in the Middle East and East Africa by way of new carrier MyHD, offering international channels GMA Pinoy TV, GMA Life TV and GMA News TV International at a lower cost to subscribers.
GMA Worldwide Inc. (GWI), the program syndication and licensing arm of GMA, sold more than 900 hours of program and movie titles to Brunei, Cambodia, Kenya, Malaysia, Singapore, and Vietnam, among others.
Higher operating expenses
Total operating expenses grew by 13 percent to P2.371 billion year-on-year, primarily on increased production costs (which jumped by 19 percent), the depreciation of the commissioning of new studios in the regions and from major renovations and upgrade of other broadcast facilities nationwide.
General and administrative expenses (GAEX) surpassed last year by only 5 percent, mainly due to the increase in personnel cost.
Gozon noted the high production cost was mainly driven by the network's home-produced shows like the epic-serye Indio, which is "a very expensive program not only because of its props and prosthetics, but [also] because of high cost of talent fees."
'The ratings game'
"We have been doing more produced programs to compete better in the ratings game. The locally produced program is more expensive than buying programs. There will be an increase [in the coming quarters] but less than 19 percent," he added.
For the special coverage of the midterm elections, GMA allotted P91 million, utilizing the highly sophisticated Vizrt Immersive Graphic System interfaced with the Mosys camera tracking system to allow for a more dynamic and seamless presentation of information, context packages and real time immersive graphics.
The same tracking system was used by CNN for its 2012 US Presidential Election coverage.
The network also purchased a digital mobile news gathering system called 10 Ibis Pro for a faster exchange of information between the base and GMA reporters, among other facilities including the fully-equipped GMA election hub.
First quarter earnings before interest, taxes, depreciation and amortization (EBITDA) was P1.189 billion, a 56 percent growth versus the same period last year.