ABS-CBN eyes P1 B from political ads

MANILA, Philippines - Publicly listed ABS-CBN Corp. of the Lopez family expects P1 billion in windfall revenues from political advocacies and advertisements for the upcoming May elections.

Rolando Valdueza, chief financial officer of ABS-CBN, said in a press conference that analysts expect the company to book about a third of the P3 billion in additional revenues from political ads during the 2010 presidential and senatorial elections.

“ABS-CBN will most likely hit P1 billion in revenues from the political advocacies and advertisements according to analysts, compared to the P3-billion revenues from political ads during the 2010 presidential elections,” Valdueza said.

The windfall revenue expected by ABS-CBN is half the P2-billion windfall revenue expected by rival GMA Network Inc.

For his part, ABS-CBN chairman and chief executive officer Eugenio Lopez III told reporters that the company is not affected by the recent decision of the Supreme Court stopping the Commission on Elections from limiting the airtime of political advertisements.

“It doesn’t affect us because we limit the number of minutes of commercials we have per hour. Maybe it is good for the other networks, in terms of per minute we are already full to begin with, so there is no impact,” Lopez said.

Valdueza said ABS-CBN is spending P5 billion for its capital expenditures this year or about the same level as the amount spent by the company last year. AThis year’s budget will be funded through the company’s internally generated funds.

Valdueza also said that based on the trend in the first quarter of the year, this year’s earnings will be “better” compared to last year due to regular advertisements and positive economic development.

“Yes, it will be driven by strong ratings, exceptional performance of our consumer sales, driven by Star Cinema and SkyCable,” he said when asked about the company’s earnings this year.

The consolidated net income of ABS-CBN plunged 29 percent to P1.81 billion in 2012 from P2.42 billion in 2011.

Removing the effects of the gain from the sale of investments recognized in 2011 from the sale of SkyCable debt instruments amounting to P1.02 billion, the net income of the company would have increased by 23 percent fueled by strong advertising revenues and consumer sales.

Consolidated revenues rose 13 percent to P31.7 billion as advertising revenues grew 8 percent to P19.1 billion, while consumer sales jumped 19 percent to P12.7 billion.

SkyCable continued to be a major driver of growth, with revenues increasing by 32 percent to P5.9 billion due to the acquisition of Destiny Cable.

Total operating and other expenses increased 12 percent to P26.2 billion brought about by increases in production costs, cost of sales and services, and general and administrative expenses.