ABS-CBN allots P5B for capital expenses

MANILA, Philippines - Broadcast giant ABS-CBN Corp. is spending P5 billion for its capital expenditures as it expects significantly higher earnings this year on the back of the country’s improving economy as well as higher advertisement revenues due to the scheduled elections in May.

ABS-CBN chief finance officer Rolando Valdueza said in a press conference that this year’s budget for capital expenditures which is almost the same as last year’s P4.9 billion would be spent for equipment replacement, transmission facilities, film and program rights acquisition, among others.

Valdueza pointed out that this year’s capital expenditures would also include P2 billion for the operations of SkyCable Corp. which is slightly higher than last year’s P1.8 billion.

He explained that this year budget for capital expenditures would be funded through a combination of equity and debt.

“We continue to assess and weigh our options with regards to our fund raising activities,” he explained.

Based on the trend in the first quarter of the year, Valdueza said this year’s earnings would be “significantly higher” compared to last year due to regular advertisements as well as positive economic development.

“If you look at the first three months, it is definitely better than the last quarter of last year and the first quarter of this year. So far the trend is coming from regular spending as well as a function of the positive economic development,” he added.

The company, he explained, has yet to assess the impact of the upcoming elections in May.

“We don’t know yet we will have a sense. Political ads will start to kick in after the Holy Week,” he said.

The company reported yesterday that its consolidated net income plunged 29 percent to P1.81 billion last year from P2.42 billion in 2011.

Removing the effects of the gain from the sale of investments recognized in 2011 from the sale of SkyCable debt instruments amounting to P1.02 billion, the net income of the company would have increased by 23 percent fuelled by strong advertising revenues and consumer sales.