ABS-CBN losses rise

MANILA, Philippines — Losses of ABS-CBN Corp. ballooned in 2020, and continued to do so in the first quarter as the denial of the company’s broadcast franchise took a heavy toll on its financial performance.

ABS-CBN saw its net loss surge by 412 percent to P13.53 billion last year from P2.65 billion the previous year as revenues were cut by half.

The company generated consolidated revenues of P21.4 billion from advertising and consumer sales, 50 percent lower than the P42.84 billion recorded in 2019.

ABS-CBN attributed the 69.2 percent year-on-year drop in advertising revenues to absence of the company in the free-to-air advertising space.

This was following the cease-and-desist order issued by National Telecommunications Commission on its broadcast operations on May 5 last year, and the eventual adoption of a resolution denying its franchise application by the House Committee on Legislative Franchises on July 10.

ABS-CBN said consumer sales, which fell 28 percent year-on-year, were likewise affected by the cease-and-desist order as this prohibited the company in engaging in Sky Cable’s direct-to-home services and distribution of TV Plus boxes.

The COVID-19 outbreak also resulted in the closure of ABS-CBN’s various ancillary operations such as Heroes Burger, Kidzania Manila, and Studio XP.

On top of retirement costs, the company said it provided additional separation benefits worth P1.1 billion last year as it was forced to implement a retrenchment program covering over 4,000 workers.

ABS-CBN closed 2020 with total consolidated assets of P58.9 billion, 25.6 percent lower than total assets of P79.2 billion in 2019.

Meanwhile, the company continued to incur higher losses in the first quarter.

ABS-CBN posted a net loss of P1.94 billion in the three-month period ending March, a 159 percent jump from the P751 million net loss in the same period last year.

Consolidated revenues of the company during the quarter fell by 54.6 percent to P3.92 billion from P8.64 billion in the same period last year.

ABS-CBN said the launch of the digital streaming channel “Kapamilya Channel” and the blocktime deal reached with Zoe Broadcasting allowed the company to generate P673 million in revenues in the first quarter.

The company said it also continued to focus in growing its broadband subscriber base as it was unable to provide direct-to-home service, with Sky Cable’s revenues reaching to P2.5 billion during the three-month period.

With the absence of a valid government franchise to operate certain businesses, ABS-CBN last year entered into an agreement with its existing lenders to provide for the creation of a mortgage and security interest over certain assets of the company, the opening and maintenance of debt service reserve account, pre-payment of the P4 billion of its loans, and an amendment of existing loan agreements.

Last week, the company and its existing lenders agreed on a P14.56 billion-mortgage registration amount as part of the standstill deal it was able to reach with them.

ABS-CBN said it would closely coordinate with its creditor banks and negotiate for waivers of certain covenants as the need arises.

“Management assessed that the company will be able to maintain its positive cash position and settle its liabilities as they fall due within the next 12 months through management’s plans on future actions,” it said.