GMA sustains winning streak; ABS-CBN trims losses

MANILA, Philippines — Rivals GMA Network Inc. and ABS-CBN Corp. continued to post contrasting financial results in the first three quarters, but the latter is starting to narrow losses it has incurred since its painful shutdown that provided a tailwind to its main competitor.

In a disclosure to the stock exchange on Tuesday, GMA reported that its net income grew 54% year-on-year to P6 billion in the first nine months. During the period, ABS-CBN posted a net loss of P3.8 billion, albeit 48.4% smaller compared with losses it recorded a year ago.

What drove the two companies’ financial performance to head into opposite directions was the non-renewal of ABS-CBN’s legislative franchise last year. The shutdown of the former broadcast giant, a first since the Marcos dictatorship did the same in 1972, had strikingly different effects on ABS-CBN and GMA’s advertising revenues, the companies’ major source of earnings.

In the January-September period, GMA’s advertising revenues grew 35% year-on-year to P15.5 billion, accounting for 93% of the network’s consolidated revenues which jumped at an annualized rate of 31% to P16.6 billion. Across its TV Channels, the company said GMA-7 cornered the lion’s share of consolidated topline “buoyed by some advertisers shifting to GMA when ABS-CBN went off-air.”

At the same time, GMA said it is already feeling the "presence" of upcoming election season, when earnings of media companies are extraordinarily high because of political advertisements.

On the other hand, advertising revenues of ABS-CBN sagged 35.5% on-year to P3.8 billion in the past nine months, shrinking this segment’s share to total revenues to around 30%. During the period, consumer sales, which fell 19.8% annually to P9 billion as the non-renewal of franchise was compounded by pandemic troubles, kept the company afloat.

What ABS-CBN did to temper its losses was to enforce “stringent cost cutting measures” that included slashing production costs. In the first nine months, figures showed general and administrative expenses dropped 36.4% year-on-year to P5.7 billion. The Lopez-led media company is also widening its digital presence to survive, although this shift has yet to help the company return to profits.

As of 11:22 a.m. Tuesday, shares in ABS-CBN were trading up 0.29% while GMA gained 0.27%.