ABS-CBN unit eyes 30% profit growth

The international arm of ABS-CBN Broadcasting Corp. is eyeing about 8,000 new subscribers of The Filipino Channel (TFC) in Europe by the end of 2004 to meet its 30 percent profit growth target this year.

According to ABS-CBN Global Ltd. managing director Rene Encarnacion, the company, which has already signed on 400 subscribers after its European launch in December, is expecting an increase in subscription sales due to the interest of Filipino communities in the said continent. TFC holds office in Milan, Italy where there are about 100,000 Filipino households.

Encarnacion said ABS-CBN Global registered a net income growth of more than 20 percent in 2003. "Our growth was primarily driven by the expansion in subscriber base. We also had a nominal increase of subscription price in our US market last year."

He said estimated total sales for 2003 is more than $50 million (P2.75 billion), while subscription earnings reached more than $25 million and advertising revenues stood at $3 million.

ABS-CBN Global is a wholly-owned subsidiary of the Lopez-led media giant. It operates TFC, which is a 24-hour channel carrying all-Filipino programs through direct-to-home satellite services in the US, Asia and the Middle East.

The unit is expected to be a significant revenue driver for the parent company in 2004. Encarnacion added that the subsidiary is ready for the challenge, saying that ABS-CBN Global still has a bigger market in other parts of the world just waiting to be tapped.

"It’s a real high-growth area. There are opportunities for expansion all over the world. There’s a lot of room for growth, particularly with the continued migration of Filipinos," he said.

North America remains the major market of TFC with at least 130,000 subscribers in the US and its territories. The channel also has operations in Australia, Japan, Indonesia and other countries in the Asia Pacific. The company plans to expand its Asian operations by penetrating Hong Kong, Singapore, Taiwan and Canada.

ABS-CBN Global recently signed a 10-year contract with American satellite service provider, PanAmSat8, which allows for a broader programming reach across the globe.

"We are confident that with our infrastructure and long-term contracts with cable and satellite providers we can meet our revenue target for this year and also sustain the profitability of the business," Encarnacion said.