The flagship unit of the Lopezes’ Benpres Group, ABS-CBN registered a 19-percent drop in net income to P1.336 billion in the first nine months this year as a result of higher depreciation and interest charges.
While realizing a 15-percent hike in gross revenues mainly from airtime sales, its operation expenses grew at a faster pace of 23 percent year-on-year, the company said.
Furthermore, the fourth quarter, which is traditionally the season with the highest ad revenues, turned in a 15-percent drop in advertising minutes as the general weakness in consumer demand forced advertisers, particularly in the packaged goods industry, to cut their media expenses.
ABS-CBN said the total media industry value is expected to decline by as much as 30 percent this year due to the pull down in the fourth quarter.
Aside from its flagship VHF station Channel 2, ABS-CBN controls several other media companies such as UHF Channel Studio 23; cable channel ABS-CBN News Channel (ANC); online news provider ABS-CBN Online; radio stations DZMM (AM) and DWRR (FM); film outfit Star Cinema; recording studio Star Records and cable firm Sky Vision.
"To remain competitive in a markedly changed business environment, ABS-CBN plans to cut cash operating expenses by 15 percent or as much as P500 million in 2002," the company said in a statement.
The measure will involve a three-percent reduction in manpower complement initially, reduction in production expenses and exploring other efficiencies particularly in the production side of its operations.
Likewise, ABS-CBN will cut down its capex from P2.3 billion to only P1 billion next year, depending largely on internally generated cash to support operations.
The ABS-CBN group employs the largest workforce in the broadcasting and entertainment industry with over 5,000 regular staff and talents. Some of its major talents, in fact, have also agreed to a decrease in their effective fees as a means to help the network weather the uncertainties next year.