ABS-CBN 1H recurring net income up 33%


Posted at Aug 14 2008 12:03 PM | Updated as of Aug 27 2008 09:12 PM

ABS-CBN Broadcasting Corp., the country's largest media conglomerate on Thursday said it posted a 33-percent rise in recurring net income or P754 million for the first six months of the year, compared to the P567 million in the same period last year driven by strong sales.

In a statement, ABS-CBN said consolidated revenues for the first semester reached P10.2 billion.

Consolidated net income for the first semester was at P754 million, or two percent higher than its year ago figure of P739 million.

"Last year’s net income included P172 million of non-recurring profits from DirecTV license fees. This year's first semester earnings was boosted by the P514 million income registered in the second quarter," said Charles Gamo, Investor Relations head of ABS-CBN.

DirecTV license fees were paid by subscribers who migrated to the DirecTV platform and continued to remain subscribed for a period of time. DirecTV is a direct-to-home satellite system provider in the US. It had the exclusive right to sell packages of ABS-CBN's The Filipino Channel.

It said the growth in minutes and increase in rates of advertisements more than made up for the non-recurring political advertising revenues generated in the first half of 2007 during the midterm national and local elections.

The broadcasting firm also said airtime revenues for the 2nd quarter of 2008 rose to P3.5 billion, a 25 percent improvement from the first quarter of the year. This resulted in airtime revenues for the first semester to grow to P6.36 billion which is a 3 percent growth year-on-year on total airtime revenues and 9 percent growth on recurring airtime revenues, net of P298 million non-recurring political ad revenues, on the first half of 2007.

Direct sales from core business rose 14 percent year-on-year in the first semester to P3.06 billion after 2nd quarter direct sales grew 22 percent year-on-year, it said, adding that this was boosted by the strong performance of its international unit ABS-CBN Global. SkyCable’s additional direct sales contribution lifted direct sales in the first semester to P3.87 billion or 47% increase year-on-year.

Growth in expenses meanwhile was contained at four percent. Production expenses decreased two percent while general and administrative expenses grew by only 4 percent in the first semester owing to “enterprise-wide cost management and process improvement initiatives.” With the consolidation of SkyCable however, ABS-CBN’s total expenses grew 15 percent.

Recurring earnings before EBITDA (earnings before interest, taxes, depreciation and amortization) for the January-June 2008 period was recorded at P2.68 billion, up 5 percent from the full EBITDA of P2.54 billion in the first semester 2007.

Compared however to the recurring EBITDA for the first half last year of P2.54 billion, without the non-recurring gains of P263 million of Direct TV license fees, recurring EBITDA for first semester 2008 was 18 percent higher.

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