No end in sight for ABS-CBN’s woes

MANILA, Philippines — Media giant ABS-CBN Corp. suffered a setback in its efforts to become profitable again, tripling its net loss to nearly P10 billion last year due to the impairment of some of its legacy assets.

The company’s net loss widened to P9.76 billion in 2023 from P2.46 billion in 2022, to end another year in the red.

ABS-CBN, however, kept its revenue flat at P18.51 billion and cut its spending by six percent to P14.85 billion, but the network realized an impairment loss of P9.12 billion.

It suffered the impairment loss from goodwill and non-financial assets in the broadband and cable businesses. Companies list an asset as an impairment loss once it has depreciated more than its value when it was acquired.

ABS-CBN lost the right to air on free TV when lawmakers rejected its bid for a fresh franchise in 2020. As a consequence, ABS-CBN not only lost an avenue for revenue generation, but its broadcasting assets like towers and transmitters depreciated quicker.

ABS-CBN’s pay TV provider Sky Cable Corp. also lost its right to offer direct-to-home services, leaving it with the broadband business to survive.

To date, Sky Cable owes P4.53 billion to lenders and is working on paying them within the year as committed.

Recently, Sky Cable has obtained term extensions for the maturity of its loans with the following banks: Robinsons Bank Corp., one year, payable in October; Bank of the Philippine Islands, six months, due on July 9; and Security Bank Corp., 88 days, until May 3.

Telco giant PLDT Inc. was supposed to buy out Sky Cable for P6.75 billion, but the transaction was called off in February. PLDT and Sky Cable decided to keep to themselves the reason for the withdrawal, but said it was an agreement reached mutually.

Had PLDT proceeded with the buyout, Sky Cable would have to fold its pay TV. Further, the sale would have reduced the financial strain on the Lopez empire, as it will be freed of a business that has struggled to recover since 2020.

The glimmer of hope for ABS-CBN is that its decision to expand in digital platforms and partner with media giants here and abroad is starting to pay off.

ABS-CBN grew its revenue from content production and distribution by eight percent to P11.31 billion in 2023 on the diversification of its revenue stream.