ABS-CBN profit drops 21% to P191 million in first quarter

MANILA, Philippines – Media conglomerate ABS-CBN Broadcasting Corp. reported a net income of P191 million in the first quarter this year, down 21 percent from the P242-million profit recorded the previous year, mainly due to the decline in advertising minutes and higher expenses incurred by its cable television unit.

In a press briefing Friday, ABS-CBN chief financial officer Rolando Valdueza said SkyCable incurred total expenses of P887 million, bringing consolidated expenses up 28 percent to P4.95 billion.

This offset the 24-percent growth in total revenues to P5.29 billion.

Valdueza said SkyCable has started upgrading its existing residential broadband internet service by providing up to 12 mbps download speed, which is four times faster than any residential DSL. In addition, the cable TV firm continues to purchase new cable modem termination system to better serve its subscribers.

SkyCable contributed P878 million to total revenues but incurred a net loss of a little less than P20 million during the period under review, Valdueza said.

He said ABS-CBN’s airtime revenues fell two percent to P2.76 billion as advertising minutes dropped by as much as 20 percent.

Direct sales grew 76 percent to reach P2.52 billion, accounting for 48 percent or nearly half of consolidated revenues.

Earnings before interest, taxes, depreciation and amortization (EBITDA), on the other hand, increased 31 percent to P1.35 billion, registering an EBITDA margin of 26 percent.

Cost of sales likewise went up 15 percent to P842 million from P734 million.

Moving forward, ABS-CBN expects flat income growth for this year if not slightly better than the 2008 figure, Valdueza said.

 ABS-CBN’s vice president for research and business development Vivian Tin said advertising load has been improving since April as the number of advocacy ads rise and more multinational companies promote their products.

Based on the national TV audience measurement of Taylor Nelson Sofres (TNS), ABS-CBN’s total day ratings have been increasing from 16 percent in February 2009 to 18 percent in April.

In primetime, where most of airtime revenues are generated, ABS-CBN maintained its decisive lead over its main rival with 30 percent ratings in April 2009. This translates into a 49-percent audience share for ABS-CBN during the primetime block.

In April alone, ABS-CBN’s programs held nine and the first eight of the top 10 slots of most-watched TV programs nationwide.