GMA Network suffers 30% net income drop to P1.58B in 9 mos

MANILA, Philippines - Broadcast firm GMA Network Inc. suffered a 30-percent drop in net income in the first nine months of the year to P1.58 billion due to the continuing industry-wide slowdown in advertising spending.

In a briefing yesterday, GMA chairman and chief executive officer Felipe L. Gozon said the financial crises in Europe and the US have put a dent on the company’s profits as multinational companies scrimped on advertising.

GMA registered a seven percent decline in consolidated revenues to P10.1 billion from P10.88 billion in 2010, which then included political ads. Earnings before interests, taxes, depreciation, and amortization (EBITDA) likewise dipped 28 percent to P2.72 billion.

The network likewise reported a six percent rise in expenses to P6.5 billion from P6.18 billion.

Revenues from international operations, on the other hand, went up three percent to P719 million, largely due to the appreciation of the peso against the dollar.

In view of the uncertainty on the global front, the broadcast firm said it would miss its income target of P3 billion this year.

GMA chief finance officer Felipe Yalong said the network is likely to post P2 billion in earnings this year, significantly lower than the P2.8 billion recorded in 2010.

Yalong said companies will continue to cut back on spending unless they see some improvement in the global economy.

Airtime revenues from television and radio contributed the bulk of revenues worth P9.253 billion, 16 percent higher than the previous year’s top line comprising regular advertising load.

Gozon, however, said he is cautiously optimistic the company will perform better next year given heavy investments made in 2011.

To maintain its dominance in nationwide TV ratings, GMA will continue beefing up its equipment and infrastructure in key regions in the country. Its signal, which arguably has the widest reach among the country’s free-to-air channels, can cover approximately 95.7 percent of national urban television households.

GMA’s originating stations in Dagupan, Cebu, Iloilo, and Davao, as well as its satellite stations in Naga, Bacolod, Cagayan de Oro, and Gen. Santos, contribute positively to the company’s top line.

Online, the network has successfully established GMA News Online (www.gmanews.tv) as the number one local news website visited by Internet users in the Philippines. This is according to data of Effective Measure, the Australian company recently named by leading Philippine online publishers as the official third-party audience measurement provider.

As part of the network’s corporate strategy to diversify its revenue-generation streams, GMA New Media Inc. (NMI), the network’s digital arm, in partnership with Manila Jockey Club Inc. will launch a new online gaming called Gamespan in the fourth quarter of the year.

Ari Chio, vice-president for GMA investor relations and compliance, noted that GMA was the only TV station that showed a steady increase in nationwide audience share from September until early November.