ABS-CBN profit up 9% to P1.39 billion in 2008

MANILA, Philippines - Multimedia conglomerate ABS-CBN Broadcasting Corp. reported a nine percent growth in net profit last year as it continues to strengthen its lead in nationwide TV ratings with its line up of new primetime shows.

In a press briefing yesterday, ABS-CBN chief finance officer Rolando P. Valdueza said net earnings reached P1.39 billion compared with P1.27 billion in 2007. Consolidated revenues rose 12 percent to P22.3 billion, inclusive of Sky Cable’s contribution of P2.6 billion for the three quarters beginning April 2008.

Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to P6.1 billion, up 21 percent from the previous year’s P5 billion.

Data from global research specialist Taylor Nelson Sofres (TNS) showed that ABS-CBN registered an overall audience share of 44 percent in the primetime block for March alone versus main competitor GMA’s 36 percent. It garnered a rating of 28 percent nationwide compared with GMA’s 21 percent as its TV rating in Metro Manila is fast gaining ground with the continued improvement of its transmitter facilities.

Vivian Tin, head of ABS-CBN Research and Business Analysis, said seven out the top 10 programs that dominate the primetime block are from ABS-CBN.

Tin said ABS-CBN continues to perform strongly in Northern and Southern Luzon, Visayas and Mindanao while its ratings in the suburbs and Central Luzon have significantly improved due to the ongoing retrofitting of the network’s tower and the introduction of UHF channels in provinces like Bulacan and Pampanga.

To better serve its viewing public and further improve its TV ratings, the company is changing its antenna type and increasing its tower height in Metro Manila to allow it to have better signal.

“We expect improvements in reception in suburbs starting mid-year. In Central Luzon, we have set up UHF channels so viewers can watch our programs and this has addressed the problem,” Tin said.

Valdueza said the network is setting aside P2.5 billion for its capital expenditure program this year, P1.7 billion of which will be used to upgrade transmission facilities while P700 million will go to film rights acquisition.

The programmed capital budget does not include the network’s plan to launch digital television, Valdueza said.

Amid an increasingly difficult business environment, ABS-CBN expects its net earnings to be flat this year even as its revenues are projected to post double-digit growth.

Valdueza said the revenue growth will come from the network’s international unit ABS Global, its cable channel Sky Cable and films.

“The TFC channel has been very resilient. It achieved double-digit growth last year and we’re hoping it can sustain it,” Valdueza said.

He said that the first two months of the year had been pretty tough for the network as airtime revenues declined by double digit. He, however, is confident that things will improve in the second quarter as the network started to recover beginning March.

Valdueza said Sky Cable needs around P900 million for its continued expansion program.

He said the group is considering taking Sky Cable public, hopefully by 2010. “We’re studying the timing for the IPO,” Valdueza said.