ABS-CBN eyes P2 billion profit this year

by Kathleen A. Martin, ABS-CBNnews.com

Posted at May 15 2013 05:26 PM | Updated as of May 16 2013 03:52 AM

MANILA (UPDATED/CORRECTED)-- ABS-CBN Corp. is eyeing a consolidated net income of P2 billion for this year, slightly up last year's P1.7 billion.

"If we are able to sustain the kind of growth we have for our regular ads, I think we're looking at hitting the level of P2 billion net income for 2013," Rolando P. Valdueza, group chief financial officer at ABS-CBN, said in a briefing on Wednesday.

In the first three months of the year, the media conglomerate saw its net income jump 66% to P508 million  (not billion as earlier reported) as consolidated revenues surged 22% to P4.4 billion.

Earnings from advertisements during the first quarter climbed 22% to P4.4 billion, bulk of which were from regular or non-political ads as the company only raked in P300 million from election-related ads.

Aldrin M. Cerrado, chief finance officer at ABS-CBN, noted the firm will continue to rake in profits from political ads in the second quarter but the absence of such in the second half of the year is not foreseen to drag down revenue growth.

"The second half of the year would probably be challenging without the election-related ads but we are bullish that the revenues would actually be sustained," Cerrado said in the same briefing.

ABS-CBN is eyeing to earn a total of P1 billion from political ads from Feb. 14 to May 15, election day. The firm already booked P300 million from February to March, Valdueza shared.

But aside from ad revenues, the Lopez-led firm also saw its profits from consumer sales rise 18% to P3.5 billion in the first quarter. Such segment is also expected to sustain its growth throughout the year.

ABS-CBN on the same day announced it will be raising P4 billion in fresh funds meant to be utilized for its migration to digital television.

ABS-CBN Holdings will be issuing P2.5-billion worth of Philippine Deposit Receipts that will be taken up by global firm Capital International Private Equity Fund VI, L.P. At the same time, Lopez Inc. will be subscribing to P1.5-billion worth of new ABS-CBN common shares.

Valdueza explained that the company has already spent over P1 billion in terms of capital expenditures for its digital terrestrial television (DTT) activities despite the delay in the government's announcement of which technology the country will be adopting.

"Whatever technology, the group--ABS-CBN--is ready to roll out as soon as the government makes its decision," Valdueza said.

The government has long been torn between the Japanese Integrated Services Digital Broadcasting-Terrestrial (ISDB-T) Standard and the European DVB technology. The National Telecommunications Commission earlier this year already endorsed the Japanese technology but Malacañang has yet to make an announcement regarding the standard the country would adopt.

Valdueza said ABS-CBN has been continuously building its film library with Tagalog movies in preparation for offering additional channels once the DTT technology is rolled out.

"The objective of the DTT is of course to address the signal of channel 2, and second is we're going to offer additional channels... so it is very important that we invest in acquiring these film libraries," he recounted.

Aside from building up its film library, ABS-CBN has also been investing in its transmission system and digital boxes to prepare for the DTT roll out.

ABS-CBNnews.com is the news website of ABS-CBN Corp.