MANILA, Philippines — GMA Network Inc. continued to benefit from the absence of its main rival in the television broadcast industry with profits soaring by nearly half in the nine months ending September.
GMA posted a 54 percent rise in net income during the first three quarters to P6.02 billion from P3.91 billion in the same period last year due to higher revenues and managed costs.
Aside from the hefty gains from regular operations, GMA said the increased profitability during the nine-month period was further accentuated by the reduction in corporate income tax rate from 30 percent to 25 percent following the enactment into law in March of the CREATE Act.
Revenues of GMA grew by 31 percent year-on-year to P16.56 billion as of end-September as the company’s broadcasting operations enjoyed the widest reach in the free-to-air arena.
Advertising revenues amounted to P15.48 billion, comprising 93 percent of the total revenue pie.
“This year’s top-line growth was influenced by the improvement in both average rate per minute, as well as total minutes load. The incremental minutes this year was buoyed by some advertisers shifting to GMA when ABS-CBN went off-air starting May last year owing to the expiration of its franchise and its eventual non-renewal,” GMA said.
“Furthermore, during the third quarter of this year, political advocacies already started to trickle in, thus providing additional sources of revenues,” it said.
Merchandise sales from January to September reached P392.69 million, mainly from GMA Affordabox, with more than 600,000 units sold and from sales of on-the go digital receiver GMA Now.
Meanwhile, rival ABS-CBN was able to cut its losses during the nine month period by nearly half or 48.4 percent lower to P3.78 billion from last year’s P7.32 billion.
EBITDA increased 125 percent year-on-year to P704 million.
ABS-CBN generated consolidated revenues of P12.75 billion, down by 25 percent from P17.03 billion last year.
Both advertising revenues and consumer sales saw a year-on-year decline to P3.77 billion and P8.97 billion, respectively.
ABS-CBN attributed the drop in its advertising revenues to the absence of the company in the free-to-air advertising space following NTC’s cease-and-desist order and the denial of its franchise application last year.
The company said consumer sales was also affected by the cease-and-desist order as this prohibited the company from engaging in Sky Cable’s direct-to-home services and distribution of TV Plus boxes.
Following the events of the franchise denial and the impact of COVID-19, ABS-CBN said it enforced stringent cost cutting measures to further manage the company’s financial performance.
Direct costs and expenses of the company amounted to P17.2 billion in the nine-month period, 27.5 percent lower year-on-year.