MANILA, Philippines (2nd UPDATE) - A trio of blockbuster films by Star Cinema helped drive parent company ABS-CBN Corp.'s profits higher in the first quarter.
On Thursday, ABS-CBN reported its net income jumped 7 percent to P538 million in the January to March period, from P503 million in the same period last year.
The media and entertainment company said the growth was driven by strong performance of its film business, global distribution, and pay TV networks.
Net revenues of the firm grew 3.4 percent to P8.2 billion from P7.9 billion in the same period last year.
ABS-CBN Corp. chief financial officer Aldrin Cerrado said three movies released by Star Cinema--"Girl, Boy, Bakla, Tomboy," "Bride for Rent," and "Starting Over Again"-- made more than P1 billion in combined ticket sales in the first quarter.
“Girl, Boy, Bakla, Tomboy” made P436 million, “Starting Over Again” made P404 million, while “Bride for Rent” made P334 million.
“The driver really for the first quarter are the movies. If you look at the amount of revenue that were generated by movies, it’s a big amount,” he said.
Cerrado said a minimum of three more films released in the second quarter will continue to boost revenues going forward. This includes the Vhong Navarro starrer "Da Possessed", and the upcoming Coco Martin-Sarah Geronimo film "Maybe This Time."
Star Cinema may release close to 20 films this year, more than the 16 it released last year, Cerrado added.
Ticket sales were also boosted by ABS-CBN’s improved global distribution network, which has bridged the gap in delays in theatrical releases in other territories.
“Now we are able to close the gap to a little over a week, and there’s also an increase in the number of theaters that are agreeing with ABS-CBN and Star Cinema to show the films, before you had to run after them because we didn’t have the historical track record…It’s easier for us now to talk to theaters, especially in North America,” said Cerrado.
He noted that development of more content not only in films, but in TV and digital as well, is line with the firm’s strategy of monetizing content to boost consumer revenues.
ABS-CBN forecasts that revenues from its consumer businesses will surpass advertising revenues in the next five to 10 years.
Consumer and ad revenues nearly had equal share in total revenues in the first quarter.
"I am particularly pleased that we were able to grow our net income by 7 percent considering that last year's revenues included election-related revenues," he said.
In 2013, election-related ad revenues boosted ABS-CBN profit to P2.03 billion, an increase of 25 percent from the P1.62 billion for 2012.
In the first quarter of 2013, ABS-CBN gained revenues of about P250 million from election-related ad revenues.
ABS-CBN is allocating P6 billion in capital expenditures in 2014.
The company will be spending about P600 million for two soundstages expected to be completed by the first quarter of 2015. These soundstages will be located somewhere in Bulacan.
Cerrado said soundstages can generate 10 percent to 15 percent savings in production costs per program.
ABS-CBNnews.com is the news website of ABS-CBN Corp.