ABS-CBN chief finance officer Randolph T. Estrellado said that while all remaining subsidiaries have been annexed into their core businesses, the company is assessing these firms’ operations to determine what areas can be whittled down to ensure leaner and tighter organizations.
"Right now, we have to think about cutting operational costs because some of our subsidiaries like the ABS-CBN News Channel (ANC) and foreign films distributor Skyfilms are still losing money," said Estrellado.
Last year, ABS-CBN terminated operations of six of its losing subsidiaries: ABS-CBN Consumer Products, Shopping Network Inc., Cinemagica, ABS-CBN Hongkong Club, ABS-CBN Europa Societa Per Azioni and Pinoy Auctions.
As part of its program to cut costs, ABS-CBN is capping its capital expenditures this year to P1.5 billion, including the budget for international expansion.
The company earlier disclosed that for the first quarter of 2003, airtime revenues grew by 31 percent to P2.16 billion from the same period last year. Consolidated net revenues increased by six percent to P10.9 billion mainly due to the strong recovery of the total advertising spending by the second half of 2002.
The company, however, disclosed that it experienced pressure on its operating margins as its expenses grew faster than revenues. Non-cash charges grew by 44 percent as the company began to depreciate its new broadcast complex.
On the other hand, cash expenses grew by 16 percent due to demands on production costs dictated by a more competitive broadcast environment. As a result, its income from operation fell by 42 percent to P1.66 billion.
Aside from cost-shaving plans, Estrellado said ABS-CBN this year also plans to list its international holding unit, ABS Global, in the Singapore Stock Exchange in the next five years.
Estrellado said that while the company would prefer to do the initial public offering much sooner, ABS Global is still not financially ready to engage in such a venture at this point.