ABS-CBN posts P2 billion net income in 2014

by Jon Carlos Rodriguez, ABS-CBNnews.com

Posted at Mar 19 2015 11:13 AM | Updated as of Mar 20 2015 01:06 AM

MANILA (2nd UPDATE) - Multimedia conglomerate ABS-CBN Corp. posted a net income of P2.030 billion in 2014, meeting its profit guidance of P2 billion.

ABS-CBN Corp. chief financial officer Aldrin Cerrado said last year's net income was slightly higher than 2013's P2.028 billion.

"We're happy to announce that we hit our profit guidance of P2 billion in terms of net income," Cerrado said at the ABS-CBN investors' briefing on Thursday.

Comparing last year's net income to 2013 without revenues from election-related advertising, the Lopez-led firm saw profit growth of 42 percent to P2.030 billion from P1.4 billion.

Excluding election-related spending, revenues went up 4.6 percent in 2014.

Cerrado said the firm was able to bring down production costs by 4.3 percent.

"Production costs significantly refer to the production cost of channel 2 operations, all the teleseryes, we are now able to produce them at a lower cost compared to the previous year," he said.

Revenues in the TV and Studio segment went up 17 percent to P1.4 billion from P1.2 billion driven by strong theatrical sales of Star Cinema movies.

In 2014, Star Cinema released 16 movies, 3 of which breached the P300 million mark each. These films are "Bride For Rent," "Girl, Boy, Bakla, Tomboy," and "Starting Over Again."

SkyCable growth

SkyCable revenues are also up 11.9 percent to P7.8 billion from P6.9 billion in 2013.

Cerrado said total revenues grew by P827 million driven by an 8 percent increase in cable revenues and a 37 jump in broadband revenues.

SkyCable also saw a growth of 24 percent in its subscriber base in 2014 to about 800,000.

Cerrado said the cable unit's subscriber base is expected to grow 12 to 15 percent this year. In 2017, the subscriber base is seen to reach 1 million.

In terms of revenues , ABS-CBN Group CFO Ron Valdueza said SkyCable is targeting close to P10 billion in 2015 driven by its broadband business.

"SkyCable continues to expand its broadband service, that's a key driver," he said.

Capital expenditures

ABS-CBN spent P5.6 billion in capital expenditures in 2014, a bulk of which went to digital TV, maintenance and other expenses.

For 2015, the firm is allocating P8.5 billion in capital expenditures, about P4.01 billion of which will be spent for digital TV, maintenance and other expenses.

The capex will be funded by internally generated cash and a 2014 bond offer.

A bulk of the spending will go to the construction of a soundstage in Bulacan.

Raymund Miranda, ABS-CBN chief strategy and risk management officer, said the first phase of the soundstage is set to be completed within 2015.

"We need to learn from it. Soundstages were in the Philippines for quite awhile in the 50s and 60s, but for some reason during the 70s, the studios moved away from soundstages...We will utilize the first set of soundstages to fine tune our craft and then after that we'll think about what the next phase will be," he said.

Cerrado said the company is expecting profits of about P2.4 billion in 2015, or a 20 percent growth from last year's net income.

Without election-related spending, profit growth this year is seen at around 10 percent.

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