GMA Network reports 296% net income growth

GMA Network Inc. reported over the weekend a 296-percent increase in its net income to P975 million in the first nine months of the year from only P246 million a year ago.

GMA registered gross revenues of P4.79 billion from January to September this year, 65 percent higher than the P2.9 billion reported last year. Channel 7 accounted for 95 percent of total revenues while the rest came from radio.

Operating expenses, however, went up 26 percent due to higher production costs and talent fees as GMA continuously beefs up its programming to stay alive in the highly-competitive broadcasting industry.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the period stood at P1.97 billion, 103 percent or P999 million higher than 2002.

GMA said its cost of borrowing improved by nine percent as interest expense dropped to P137 million from last year’s P151 million. Lower interest rates and the settlement of quarterly dues on long term debt accounted for this favorable performance.

Commenting on the company’s performance, GMA senior vice-president for Corporate Services Felipe Yalong said the network continues to edge its biggest rival in the industry in terms of net income despite having less gross revenues and other sources of income.

GMA’s gap in ratings with ABS-CBN has been narrowing down since last year as a result of the cost-efficiency of many of its programs, Yalong said.

"Though we currently do not have other sources of revenues like cable, UHF, and international channel, which our competitor has, we have managed to perform better in terms of net profit," Yalong said.

"The GMA Management is pleased with the company’s performance and is confident that the Network will achieve all its targets for the year," Yalong added.

GMA expects further growth with the forthcoming launch of its international channel and the re-opening of its UHF channel.

It hopes to tap the international market early next year with the United States as its first test market.

The company is currently in talks with two of the biggest direct-to-home operators in the US to jumpstart its planned expansion.

The company will launch its international channel initially in North America where there is a large concentration of Filipinos.

This is expected to compete with ABS-CBN’s The Filipino Channel, which has 120,000 subscribers as of end-December 2002.

Apart from this, GMA is planning to beef up its radio operations and programs to further enhance its revenue stream. The network intends to develop a regional station to further broaden its presence nationwide.

GMA-7 has already strengthened its presence in Davao and is looking into further expanding its services to other provinces to increase its audience share. The company has a network of 45 VHF and two affiliate stations nationwide, and can be seen in a number of households in Asia, Australia and Hawaii via satellite. It can also be heard on the airwaves through dzBB-AM and dwLS-FM in Manila; dySS-AM and dyRT-FM in Cebu; and in 27 RGMA radio stations throughout the country.

The network is owned by the management triumvirate composed of Felipe Gozon, Gilberto Duavit, and Menardo Jimenez who introduced a programming concept catering to the new audience.