MANILA, Philippines - GMA Network Inc. posted a 38-percent drop in its net income from P855 million in the first quarter last year, which was mainly driven by political advocacies and advertisements, to P534 million in the same period this year.

GMA chairman and CEO Felipe Gozon, however, said they remain confident the company will deliver better financial performance in the succeeding months as it continuously emerges a ratings winner despite stiffer competition.

Including political advertisements, revenues went down 13 percent to P3.14 billion from P3.62 billion while expenses increased three percent to P1.99 billion from P1.93 billion. Airtime revenues dropped to P2.86 billion from P3.34 billion due to P973 million in non-recurring political ads booked during the first quarter of last year.

Excluding political ads, GMA said it started 2011 on the upward trend with an 18 percent growth in consolidated gross revenues from regular advertising and subscription accounts in the first three months to P3.138 billion from P2.62 billion delivered last year.

Again excluding political ads, airtime revenues delivered by platforms television and radio from regular advertisers grew 21 percent to P2.865 billion from P2.367 billion. Flagship business unit Channel 7 and GMA Radio hiked regular advertising revenues by 25 percent and 19 percent, respectively.

But if the political ads are taken into account, Channel 7 registered a 25-percent increase in revenues to hit P2.74 billion from P2.19 billion while Channel 11’s dropped 56 percent to P45 million from P101 million. Radio revenues also went down 19 percent to P85 million from P71 million while subscription and other revenues declined four percent to P273 million from P285 million.

GMA’s international business also posted lower revenues during the January-March period this year at P230 million from P235 million while revenues from subsidiaries and others dropped 15 percent to P43 million from P51 million.

Earnings before interests, taxes, depreciation and amortization (EBITDA) went down 34 percent to P926 million from P1.41 billion.

Capital expenditure during the first three months of 2011 was at P241 million from P107 million in the same period last year. For the whole of 2011, GMA Network has budgeted P719 million for capex compared to P428 million last year.

Gozon emphasized that before 2010 ended, their marketing has already booked up to 50 percent of their expected revenues for 2011.

He explained that the results of the first quarter, removing the political ads which have a different rate structure, show that GMA improved from last year when it comes to regular recurring ads. “The first quarter is about 20 percent of the total. Our cost is not growing as fast as our revenues. We are confident about 2011 being better than last year. And that confidence is not coming out of the blues.”

“GMA maintains its lead in audience share from January 2011 to date. With majority of the country’s population now attuned to GMA, I look forward to a more solid liaison with our partners, the advertisers and viewing public alike,” Gozon added.

For his part, GMA president and COO Gilberto Duavit Jr. pointed out that there is a more than substantial reason to believe that the company will hit its P3 billion net income target for 2011.

Continuing to build on its global brand, international channels GMA Pinoy TV (GPTV) and GMA Life TV (GLTV) hiked subscriptions by 10 percent and two percent, respectively, this first quarter. GMA International likewise readies for the launch of GMA News TV (GNTV) international edition in July.

On the other hand, GMA’s syndication sales and acquisition arm, GMA Worldwide Inc. (GWI), sold P6.6 million worth of programs with new markets in Kenya, Tanzania, Vietnam, Malaysia and Brunei.

Meanwhile, newly launched GNTV made P12 million from its launch in February 28 till end-March. GNTV is the first and only free-to-air news and public affairs channel on VHF (very high frequency). Because it is on free TV, viewers do not need to pay a cable service provider to get the latest news and information.

Duavit also revealed that the balance of undeployed capex is committed primarily to increase GMA’s signal and reach to the primary, secondary and tertiary areas. “There will be a number of satellite regional stations. Three are planned, which will be set up this year. We are seeing an incidence of bundling our services with other carriers,” he said.