GMA Network profit surges 57% to P251M in 1st qtr

GMA Network Inc. reported that its first quarter net income grew by 57 percent to P251 million, as revenues rose 25 percent to P1.48 billion, P107 million of which came from political advertisements.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the period amounted to P548 million, up by 40 percent from the previous level.

Operating expenses, on the other hand, surged by 21 percent or P138 million due to increased production costs, amortization of program rights and salaries and allowances, all of which were geared toward maintaining the network’s lead in overall TV ratings. GMA owns and operates the Channel 7 network.

Felipe Yalong, GMA-7 senior vice-president for corporate services, said the company’s financial performance in the first quarter has boosted their optimism in reaching their targets. "We are very positive of sustaining the momentum we have established during the first quarter," he said.

Yalong stressed that the company continued to post higher profits than its competitor despite having fewer sources of revenues.

GMA-7 is projecting a 50-percent increase in net income this year as it expects to generate higher revenues from its TV and radio operations. Also expected to contribute to improved earnings is the planned international channel, which will be launched soon.

Officials expect international operations to account for 25 percent of the company’s bottomline by the fourth or fifth year of operations.

Also banking on sustained profitability, GMA-7 expects to be debt-free by end-2005 as it plans to settle the remaining portion of a P1.9-billion loan secured in 2000. The company will pay P500-million worth of principal loans this year, using internally-generated funds.

GMA-7 posted a net income of over P1 billion last year or more than double the company’s net income in 2002 of P406 million. Revenues likewise jumped 29 percent to P6.2 billion from only P4.8 billion.

The network exceeded its 2003 income and revenue targets as a result of the cost-efficiency of many of its programs.

To further strengthen its foothold in the industry, GMA-7 is allotting P350 million for its capital expenditures this year anchored on the launch of its international operations in North America, the revival of its ultra high frequency (UHF) TV station, and the production of two or three movies.

The company is targeting to offer its locally-produced programs abroad between June and August this year, with North America as its first expansion site.

GMA-7 will likewise continue to upgrade its production facilities to further broaden its presence nationwide. GMA is particularly keen on expanding its services to Davao, Iloilo, Cebu and other key strategic areas.

GMA-7 has a network of 45 VHF and two affiliate stations nationwide, and can be seen in a number of households in Asia, Australia and Hawaii via satellite. It can also be heard on the airwaves through dzBB-AM and dwLS-FM in Manila; dySS-AM and dyRT-FM in Cebu; and in 27 RGMA radio stations throughout the country.