ABS-CBN mulls new revenue sources; eyes digital expansion

MANILA, Philippines — Multimedia giant ABS-CBN Corp. is exploring substitute sources of revenues that include the expansion of its digital platforms and development of new products to mitigate the impact of the temporary closure of its television and radio stations.

ABS-CBN said in a stock exchange filing yesterday the cease and desist order issued by the National Telecommunications Commission significantly impacts the company’s media, networks and studio entertainments (MNSE) operations.

As of end-September last year, revenues from the MNSE segment amounted to P23.3 billion, of which approximately 68 percent was free-to-air advertising.

On a consolidated basis, free-to-air advertising was approximately 50 percent of the company’s consolidated revenue.

“The actual impact on MNSE operations is difficult to estimate at this point since it will depend, among other things, on the duration of the time its television and radio stations are off-air, and its ability to generate alternative sources of revenues to make up for the shortfall,” ABS-CBN said.

“Even as the impact of the COVID-19 pandemic on the Philippine and global economy is yet to be fully realized, the order will put additional financial burden on the company,” it said.

Aside from exploring substitute sources of revenues and alternative means to reach its audience, ABS-CBN said it would continue to implement cost control measures, reducing general administrative expenses or overhead and rationalizing capital expenditures.

The company is also formulating measures to protect the welfare and interest of its employees.

As of September 2019, the company’s long-term debts amounted to P21.34 billion.

“During these challenging and unprecedented times, the company is committed to honor all existing obligations for goods delivered and services rendered by its third party suppliers.

Currently, we expect to pay all our bank debts in accordance with the existing payment schedule,” it said.

Trading of shares of publicly-listed ABS-CBN Corp. and ABS-CBN Holdings Corp. were suspended on May 6 after the broadcast giant was ordered to shut down.

The Philippine Stock Exchange (PSE) required the ABS-CBN to submit a full disclosure on the impact of the cease and desist order on its business, financial condition, operations, and prospects of the company, as well as its business continuity plan, risk mitigation measures, and such other material information for the investing public.

With ABS-CBN’s disclosure yesterday, the PSE said  trading of ABS-CBN shares would resume on Monday.

Meanwhile, ABS-CBN in a separate disclosure said Play Innovations Inc., the franchisee of KidZania Manila, has decided to file a temporary suspension of operations with the Department of Labor and Employment effective June 16 to August 15, 2020 as the successive extensions of the quarantine have adversely affected the company.

The temporary suspension is being undertaken to manage and mitigate further losses to the business while exploring new revenue solutions, according to ABS-CBN.

Kidzania Manila, which provides a learning experience for children ages four to 17, has remained closed since March 11, before the implementation of the enhanced community quarantine as part of safety measures in preventing the spread of COVID-19.

“With the eventual shift to general community quarantine, KidZania Manila will still not be allowed to open during this period, as current GCQ guidelines issued by the Inter-Agency Task Force still prohibit those in the kids industry from operating; ban entertainment-related mass gatherings; and forbid children to leave their homes,” it said.

“While the play city’s operations remain suspended, the company commits to assist the employees who will be in furlough by providing them financial assistance and health insurance benefits,” the firm said.