ABS-CBN sees P2-B earnings this year

MANILA, Philippines - Multimedia conglomerate ABS-CBN Corp. is confident it could deliver its P2 billion promised earnings this year on the back of strong revenues arising from political advertisements.

ABS-CBN chief financial officer Aldrin Cerrado said on the sidelines of the “Rising Stars of the Philippines” forum organized by Asian Investor and Finance Asia said the company is on track to meeting its profit guidance for the year.

“We will meet our profit guidance which is P2 billion,” Cerrado stressed.

The net income of the Lopez-owned firm jumped 44 percent to P1.34 billion in the first half of the year from P927 million in the same period last year as revenues surged 23 percent to P17.06 billion from P13.838 billion on the back of higher regular advertising revenues as well as election-related ads.

During the period, ABS-CBN booked P1.2 billion worth of election-related advertising. This raised the share of airtime revenues to total revenues to 59 percent from 56 percent but reduced the share of consumer sales to 41 percent from 44 percent.

Cerrado said the company is bullish about 2014 despite the fact that there would be election-related advertising next year.

He said the strong 7.6 percent gross domestic product (GDP) growth in the first half of the year would fuel consumer spending.

“There will be no any political advertising next year. But with the GDP growing at that rate, hopefully consumers spending will be fueled by private spending and public spending,” he stressed.

According to him, higher consumer spending would prompt multinational companies led by consumer-oriented companies like Procter and Gamble, Unilever, and others to place more advertisements.

“Higher GDP will push consumer spending and then will help Uniliver, P&G to hit their revenue targets and they have to do a lot of advertising not just in ABS-CBN but also in other networks,” Cerrado said.

He explained that the global operations of ABS-CBN would continue to play a major role contributing about 15 percent to total revenues.

According to him, global operations contributed about P4.5 billion to the company’s total revenues that amounted to P29 billion last year.

Total revenues of ABS-CBN Global inched up six percent to $64.929 million in the first half of the year from $61.357 million in the same period last year with the growth coming from the Middle East, Canada, Asia Pacific, Australia, and North America.