GMA Network profit down 43% as ad revenue tumbles

MANILA, Philippines — Broadcast giant GMA Network Inc. has endured another quarter of profit decline on the back of fewer advertising placements due to the evolving landscape of media consumption.

GMA reported a 43-percent drop in net income to P1.41 billion in the nine months to September from last year’s P2.47 billion.

By segment, GMA took a 10 percent hit in its revenue to P12.46 billion, acknowledging that ad placements on free TV are becoming fewer these days.

In particular, GMA said advertising earnings dropped by nine percent to P11.52 billion during the period from P12.68 billion a year earlier. This is especially painful for a company that relies 90 percent of its revenue from ads.

“Airtime revenues remained challenged with the changing landscape in our viewer and advertiser behavior as major factors to the drag. With this, the company has ensured that it is keeping pace with these developments and it has continuously made progress in positioning itself in the digital and online arena,” GMA said.

To offset the advertising decline on free TV, GMA increased its presence across digital platforms, where millions of viewers are now headed.

As a result, the leading broadcaster on Philippine free TV grew its online revenues by six percent on improving viewership for digital channels like Kapuso Stream.

Film unit GMA Pictures also launched its own account on YouTube to bring some of its movies to the online public.

GMA has a lot of work to do in tempering spending as revenue falls.

The network’s expenses inched up by one percent to P10.68 billion so far this year, even as it trimmed its production and sales costs.

General and administrative expenses rose by five percent to P4.78 billion on double-digit hikes in nearly all items, except for personnel costs. As GMA ramped up production, it had to pay more for facilities, services and licenses.