ABS-CBN confident of topping profit target

Manila, Philippines -  Multimedia conglomerate ABS-CBN Corp. reported a 45 percent drop in earnings in the first half of the year on the back of the effects of the one-time gain from the sale of Philippine Depository Receipts of its unit last year.

Despite the decline, ABS-CBN chief finance officer Rolando Valdueza said the company is confident that the company would be able to exceed its profit target of P1.3 billion for the year due to strong recovery in the second half of the year.

He pointed out that revenues of the company have been posting double-digit growth starting this month.

“Hopefully we can sustain this double-digit growth we are seeing since August. We may exceed the P1.3 billion-level but at what level we don’t know yet,” he told reporters.

Data released by ABS-CBN showed that its net income amounted to P927 million from January to June this year or 45 percent lower compared to P1.677 billion booked in the same period last year.

Removing the effects of the gain from the sale of Sky Cable PDRs recognized in the first half of 2011 amounting to P674 million, the net income of the broadcasting firm would have only decreased by eight percent.

On the other hand, ABS-CBN’s consolidated revenues rose nine percent to P15.3 billion from advertising and consumer sales for the first six months.

ABS-CBN’s advertising revenues went up by five percent to reach P9.2 billion in the first six months of the year as consumer sales rose 17 percent to P6.1 billion.

The company reported that Sky Cable continued to be a major driver of growth with revenues increasing by 22 percent to P2.5 billion and the growth in revenues was traced partly to the acquisition of Destiny Cable.

ABS-CBN Global posted a flat growth in revenues after registering a one percent increase in overall viewer count compared to the previous year amid the decline in subscribers in Japan and Europe that erased the double-digit growth in Canada and single digit growth in all other territories.

The company said its total operating and other expenses increased by 12 percent year-on-year to P12.5 billion brought about by increases in production costs, cost of sales and services , and general and administrative expenses.

Capital expenditure and film and program rights acquisition jumped 14 percent to P2.4 billion in the first six months amounted to P2.4 billion.

Valdueza said the ABS-CBN Group has earmarked P5 billion for the entire year.

ABS-CBN’s Sky Cable spent P3.5 billion to acquire the assets – cable TV and broadband – of Destiny, Solid Broadband Corp., and Uni-Cable TV Inc.