ABS-CBN's 2011 profit drops 25% on lack of political ads

MANILA, Philippines - Multi-media conglomerate ABS-CBN Broadcasting Corp. reported a 25 percent drop in net earnings last year to P2.4 billion due to the absence of political advertising revenues.

In a briefing yesterday, ABS-CBN president Rolando Valdueza said consolidated revenues dipped 13 percent to P28.2 billion as advertising revenues fell 19 percent to P17.6 billion.

Excluding revenues from political advocacies and advertisements in 2010, an election year, revenues still slipped four percent on higher production costs.

Valdueza said major corporations scrimped on advertising spending, driven by the global financial crisis.

He said while he expects advertising revenues to improve, he could not provide an income guidance for the year.

“It’s difficult to say how we will gauge this year. In January, we posted a double digit decline in terms of ad sales but consumer sales have been pretty much stable. In February though we see some recovery in terms of advertising business. In March, however, we registered an all-time high,” Valdueza noted.

Valdueza said SkyCable will continue to contribute positively to ABS-CBN’s bottom line.

Revenues from SkyCable rose 10 percent last year to P4.3 billion, largely due to the increased take-up of its broadband service which increased by 18 percent.

For its overseas operations, ABS-CBN Global registered an eight percent decrease in revenues due to the decline in subscriber base and the appreciation of the peso against the dollar.

While the number of subscribers increased in Canada, Asia-Pacific and Australia, ABS-CBN Global’s overall viewer count was almost flat at 2.45 million worldwide.

The company suffered a decline in the number of subscribers in the Middle East, Europe, North America and Japan.

Total operating and other expenses rose five percent to P22.3 billion, partly a result of lower cost of sales and services and general and administrative expenses as the company continued its effort to manage and control expenses.

Valdueza, meanwhile, said the media giant is on expansion mode this year, setting a capital spending of P5 billion, higher than the P4.2 billion spent in 2011. Bulk of the programmed capital budget or P2 billion will go to the continued expansion of the broadband business. Around P1.2 billion will be channeled to flagship station Channel 2.

Another P1 billion will go to the acquisition of film rights while P700 million will be used to roll out digital terrestrial TV.

Valdueza said ABS-CBN maintained its national audience share and ratings leadership last year with primetime audience share averaging 43 percent, with a 13 percentage point lead over main rival GMA Network, based on Kantar National TV Ratings figure.

ABS-CBN Film Productions, Inc. released 16 films in 2011, with five of them topping P100 million in box office receipts thus earning blockbuster status by local standards.