ABS-CBN to invest P2B on new location sound stages

Manila, Philippines -  Listed broadcasting giant ABS-CBN Corp. is building new soundstages worth as much as P2 billion to cut production costs.

Despite threats of a merger of its competitors, ABS-CBN said it is ready to face rivals and is poised to reach its earnings guidance of P1.3 billion this year, officials said.

The broadcast network is set to build 10 soundstages in a 15-hectare lot in Bulacan in the next five years worth around P200 million each, Rolando P. Valdueza, ABS-CBN’s chief finance officer, told reporters after the company’s stockholders’ meeting.

“About 65 to 75 percent of all the shooting is location and with the soundstages, we will reverse that. Maybe about 30 percent would be in location and most of the shooting would be in soundstages,” said ABS-CBN chairman and chief executive Eugenio Lopez III.

“We are in the process of finalizing the business plan for the building of a soundstage and backlot facilities for our future productions and talents,” said ABS-CBN president and chief operating officer Ma. Rosario “Charo” Santos-Concio.

Santos-Concio said the new facilities will increase production quality and save on costs.

Meanwhile, Valdueza said ABS-CBN is keeping its income guidance of P1.3 billion for the entire year despite a “flat” first half.

“The second half of this year is going to be significantly better than the first quarter this year despite problems in lunchtime [slot],” Lopez said.

The multi-media conglomerate posted a 69-percent decline in net profit to P306 million in the first quarter from P976 million a year ago. Stripping the one-time gain of P674 million in 2011, however, ABS-CBN’s net income would have been up one percent on a recurring basis.

ABS-CBN is ready to face a potentially stronger competition, officials said.

“Combining channels is not going to lead to giving you an inordinate structural advantage,” Lopez said.

ABS-CBN will continue producing quality programs with its stars to fend off competition, Lopez said.

Businessman Manuel V. Pangilinan, whose PLDT Group controls TV5, earlier said the acsuisition of GMA Network Inc. might be finalized this year.

“ABS-CBN is not for sale,” Lopez said, when asked if the company is open to investors.

ABS-CBN is also in film (Star Cinema), cable television (SKy Cable and Destiny Cable) and radio (dzMM).