GMA profit slides, ABS-CBN cuts loss

MANILA, Philippines —  The country’s biggest free TV broadcaster endured a 49 percent reduction in its profit in the first half of the year, feeling the pinch of declining ad placements and increasing production costs.

In its latest financial report, GMA Network Inc. lamented the persisting cutback in airtime sales and ad revenues, dragging its profit to P604.62 million in the first semester, from P1.19 billion a year ago.

Revenue dipped by eight percent to P7.78 billion, with GMA pinning the blame on the changing landscape of viewer and advertiser behaviors, which are shifting online.

In response, the network is expanding in the digital space to capture the fleeing demand to online channels. This effort has led to a seven percent increase in sales from digital advertising, with its sites gaining more and more viewership.

However, GMA also recognized a two percent rise in spending to P7.08 billion, as the network’s production costs went up. The company spent more for talent fees to cover new hires, and it also paid extra on amortization to keep program rights.

The positive thing for the broadcaster is that its core channel GMA 7 is showing no signs that it would give up market leadership anytime soon, dominating the free TV space without challenge.

Meanwhile, media giant ABS-CBN Corp., which used to compete with GMA for free TV leadership, brought down its net loss by five percent to P2.02 billion at the end of June.

Similar to GMA’s experience, ABS-CBN saw its revenue drop by 11 percent to P7.79 billion, but the company offset this by cutting expenses by four percent to P10.21 billion.

With no TV airtime, ABS-CBN is leaning on its digital reach and global partnerships to generate earnings, raising P4.91 billion in revenues from content production and distribution. However, its income from cable and broadband fell by 23 percent to P2.88 billion.

Currently, ABS-CBN is negotiating with lenders for the further extension to December 30, 2024 of what it calls the long stop date. This date marks when creditors can declare a default on loans that ABS-CBN failed to pay as a consequence of the non-renewal of its free TV franchise.

Originally, the long stop date was slated on June 30, 2023, but ABS-CBN obtained an extension until Dec. 31, 2023, and it is working on getting another relief.