GMA Network profit drops 37.5% in Q2

MANILA, Philippines - GMA Network Inc. posted a net income of P521 million in the second quarter this year, 37.5 percent lower than the P834 million recorded in the same period in 2010, largely due to the absence of political advertisements.

Consolidated revenues, however, rose 14 percent to P3.59 billion from P3.14 billion with the flagship TV station contributing P3.09 billion or an improvement of 14 percent on stronger programming and aggressive promotional efforts. Newly-launched all-news channel GMA News TV, on the other hand, chipped in P58 million to total revenues, up 30 percent.

GMA Regional TV, meanwhile, generated revenues of P46 million while GMA Radio plunked in P97 million.

Along with the double-digit growth in gross revenues, total operating expenses climbed 16 percent as the company set a higher programming benchmark especially for primetime programs. General and administrative expenses increased 12 percent to P1.02 billion as a result of higher personnel cost and extensive nationwide promotional campaigns.

Nevertheless, GMA chairman and chief executive officer Felipe L. Gozon remains confident the network would meet its 2011 targets and sustain its nationwide ratings dominance. Company officials earlier said they were eyeing a net income of P3 billion this year.

In the first half this year, GMA reported a 38 percent drop in net profit to P1.05 billion from P1.69 billion as revenues fell 11 percent to P6.73 billion.

“I am confident that GMA will deliver even much better performances in both ratings and revenues in the second half of 2011. In the opening of the second semester this July, GMA increased revenues by over one third of the amount made last year and pulled further away in nationwide ratings versus ABS-CBN,” Gozon said.

The network’s overseas unit, GMA International, registered revenues of P239 million in the second quarter, four percent higher than the previous quarter’s P230 million, owing to its continued expansion.

As of end-June this year, it had total of 1.85 million viewers for international channel GMA Pinoy TV (GPTV) and one million viewers for GMA Life TV (GLTV).

Among the new markets penetrated are New Jersey, Philadelphia, Pennsylvania, Virginia, Maryland, Washington DC, Detroit, Hawaii, New York and New England.

GMA officials said its international channels remained competitive despite the prolonged US recession and the weak demand for subscription in some parts of the Middle East and Japan during the period. Several countries in the Middle East were rocked by political turmoil, while northeastern Japan was devastated by an earthquake and tsunami during the period.