ABS-CBN net income drops 14% to P242M

ABS-CBN Broadcasting Corp. reported a 14 percent drop in net profit for the first quarter period this year due to the absence of one-time gains and higher expenses.

In a financial report filed with securities regulators, the country’s biggest media outfit said its net earnings reached P242 million during the period, down from the 2007 figure of P280.43 million which then included extraordinary gains from fees collected from subscribers who migrated to the DirecTV platform.

Excluding the extraordinary gains in 2007, ABS-CBN’s net income rose 23 percent.

Without the DirecTV license fees earned during the first quarter, recurring earnings increased three percent while recurring EBITDA (earnings before interests taxes, depreciation and amortization) fell two percent year-on-year.

Consolidated revenues amounted to P4.3 billion, three percent higher than the previous level on account of higher airtime revenues and direct sales.

Total expenses, on the other hand, increased seven percent to P3.9 billion.

Airtime revenue, derived from flagship Channel 2, its AM and FM radio, and the regional network, rose four percent to about P2.7 billion while airtime revenue of other platforms grew 13 percent owing to the high double-digit growth rates of cable channel ANC.

Sales of services reached P1.3 billion, up three percent.  These services refer to cable and satellite programming services, film production and distribution, interactive media, content development and programming services, post production, and text messaging, among others.

ABS-CBN Global, the group’s international operations arm, accounted for 71 percent of total sales of services, rising 28 percent.

But due to the 16 percent drop in the value of the dollar against the peso, ABS-CBN Global’s revenue growth substantially dwindled in peso terms. 

As of end-March 2008, ABS-CBN Global’s subscriber base (consisting of cable, satellite and Internet subscribers) grew 15 percent.

Sale of goods (consumer products such as magazines, audio, video products and phone cards) made a turnaround in the first quarter of this year. After a 17 percent decline in 2007, it jumped 55 percent to P158 million.

Meanwhile, big-ticket expense items such as production cost and general and administrative expenses went up, with production cost rising 10 percent to P133 million.

Excluding non-cash charges such as depreciation and amortization of program rights, cash production cost increased nine percent.

Cost of sales and services amounted to P729 million, 79 percent higher than the previous level. ABS-CBN Global, which accounted for nearly 59 percent of cost of sales and services, registered a 31 percent rise in cost of sales.  This was due to the continued expansion in Canada and Japan.

As of end-March 2008, ABS-CBN had total assets of P27.5 billion, up five percent from the previous level.  Cash and cash equivalents grew 19 percent to P2.6 billion.