Over a year after shutdown, ABS-CBN still in the red in H1

MANILA, Philippines — ABS-CBN Corp, the former broadcasting giant which landed in the maelstrom of President Rodrigo Duterte’s ire, continued to bleed over a year since being forced off air.

The Lopez-led network reported a net loss of P3.39 billion in the first half of the year, albeit 13.7% narrower than P3.93 billion net loss posted in the same period last year, according to a disclosure to the stock exchange on Monday. In the second quarter, losses moderated by 55.1% year-on-year.

That the company stayed in the red over a year since the non-renewal of its legislative franchise convinced many analysts that the road to recovery would be a long and rocky one for ABS-CBN, and the results of next year’s election would be crucial to the network’s rebound. Figures showed consolidated revenues sagged 38.7% year-on-year to P8.2 billion during the January-June period.

Broken down, advertising revenues, which typically contribute the biggest to total revenues, plummeted 57.1% year-on-year to P2.2 billion in the first half, as the company’s programs remain off air after House lawmakers allied with Duterte killed the network’s application for a new 25-year franchise last year. As a result, advertising revenues now cornered a smaller 27% share to total revenues.

The company is redirecting its resources to a massive shift to digital and has entered into a block-time deal with Zoe Broadcasting to keep its TV shows airing. These steps contributed P1.63 billion to total advertising revenues in the first half, although it is unlikely that the company commanded the same advertising rates that it used to secure before.

In turn, consumer sales, which accounted for 73% of the revenue mix in the first half, picked up the slack from sagging advertising revenues, but this too was also hurt by the franchise debacle. Revenues under this segment fell 27% on-year to P5.93 billion in the first half after the denial of franchise prevented Sky Cable Corp., an ABS-CBN affiliate, from engaging in direct-to-home services and sale of TV Plus Boxes.

Adding to the network’s woes is the impact of the COVID-19 pandemic that forced it to cease various ancillary operations such as Heroes Burger, Kidzania Manila and Studio XP.

To stay afloat, the company said it implemented “stringent cost-cutting measures”, including laying off thousands of employees. Financial results showed direct costs and expenses amounted to P11.5 billion in the first half, down 31.2% year-on-year. The company's capital expenditures and program rights acquisitions amounted to P1.8 billion in the first half.

At the same time, ABS-CBN sealed a standstill agreement with its existing lenders to prevent a default of its P21.48-billion outstanding debt.

Shares in ABS-CBN traded flat at P11 each on Monday.