GMA Network earnings trimmed by higher production cost

MANILA, Philippines — Broadcast giant GMA Network Inc. started feeling the impact of economic difficulties – from the peso’s depreciation to inflationary prsessures – as its net income declined by 53 percent in the third quarter.

In its financial statement, GMA reported that its profit was cut by more than half to P1.09 billion in the third quarter from P2.34 billion a year ago, as it had to endure higher costs as a result of a weakening peso and rising inflation.

Broken down, revenue generated by the Gozon-led network slid by 19 percent to P4.81 billion, while expenses bloated by 23 percent to P3.44 billion.

For the year, GMA’s income dropped by 15 percent to P5.09 billion as of September. While revenue rose by one percent to P15.75 billion during the period, expenses jumped by 17 percent to P10.13 billion with the return of onsite production.

GMA said it gained airtime earnings mainly from election-related placements, but its top line suffered from cutbacks in its volume accounts.

“Airtime revenues from the broadcasting segment of GMA Network was the biggest contributor, boosted by election-related placements,” the broadcast firm said.

GMA said that the deteriorating outlook on the global economy is impacting production activities on all fronts, especially with the ongoing Russia-Ukraine war, ballooning national debt, the continuous decline of the peso, and the surging prices of commodities.

The company said all these are weakening the purchasing power of the peso and, in turn, causing an increase in production costs.

GMA said that the cost of operating its facilities grew by 18 percent due to the higher cost of power supply. As production works return onsite, it also had to tap additional consultants for various units within the network.

“Another major source of this year’s increase came from the facilities cost, which hiked by P65 million or 18 percent, influenced mainly by the electricity charges. The growth in consumption in terms of kWh was compounded by the spike in generation charges coupled with the additional billings for fuel cost recovery as an adverse effect of the ongoing fuel supply crisis,” it said.

Looking ahead, GMA plans to rely on its free TV dominance and presence in the radio segment to boost its revenues in the face of economic trials.

GMA has enjoyed its position as the broadcast leader on free TV since its main rival ABS-CBN Corp. was denied a fresh franchise by Congress in 2020.