ABS-CBN profit plunges 62% to P288M on weak revenues

ABS-CBN Broadcasting Corp. reported a 62-percent drop in its net profit last year to P288 million from P750.75 million in 2004, mainly a result of weak airtime revenues as the network continued to fail in efforts to regain the lead in TV ratings.

ABS-CBN chief financial officer Randolph Estrellado said airtime revenues last year fell 6.85 percent to P10.33 billion from P11.09 billion a year earlier as the household ratings of its flagship TV station Channel 2 in Mega Manila averaged a lower 14 percent in 2005 versus 16 percent in 2004.

Estrellado said the network, however, improved its primetime TV ratings in the fourth quarter of 2005 and continued its lead in the provinces.

Gross revenues, however, went up 8.1 percent to P17.05 billion from P15.77 billion, driven by the strong performance of its international operations and license fees from DirecTV.

ABS-CBN Global’s international subscriber base increased 30 percent last year, translating to two million viewers worldwide.

But the higher revenues were partly offset by charges related to ABS-CBN’s employee reduction program.

Sales and services went up nine percent to P5.09 billion. License fees amounting to P1.7 billion were booked last year, representing revenues from the initial phase of the migration of existing US direct-to-home (DTH) subscribers to DirecTV’s platform as well as take-up of new subscribers.

With operating expense growth of 12 percent outpacing gross revenue growth of eight percent, operating income dipped 32 percent to P1.11 billion from P1.62 billion. EBITDA, or earnings before interest, taxes, depreciation and amortization – a measure of cash flow – likewise declined 10 percent to P3.59 billion.

Total expenses amounted to P16.56 billion from P14.73 billion.