Friday, 6 November 2009

GMA Network net income higher by 10% in nine months

Emilia Narni J. David
BusinessWorld
http://beta.bworldonline.com/main/content.php?id=1010

Profits of broadcast company GMA Network, Inc. rose by 10% from January to September even as big advertisers have made cutbacks.

In a press briefing yesterday, GMA Network said net income rose to P2.1 billion for the period compared with P1.9 billion last year.

Nine-month revenues went up to P10 billion from last year’s P9.3 billion, due to higher airtime revenues and international subscriptions.

Airtime revenues for January to September reached P9.2 billion, an increase of 5% from P8.8 billion in the same period last year. The rise in airtime revenues came from flagship Channel 7, QTV Channel 11, and radio.

Despite higher airtime revenues, GMA Network said there was a decrease in advertising minutes.

In the third quarter, the network’s advertising minutes fell by 6.6% to 25,774 minutes from 27,581 minutes last year. The network said though that its advertising minutes were still higher than those of competitor ABS-CBN Broadcasting Corp., which logged a 16.6% decrease in minutes.

GMA Network Chairman Felipe L. Gozon said the company recorded a cutback from big advertisers but noted that smaller advertisers have been taking up the slack. Advertising in October and November has also been picking up.

“So far for November, sales figures for advertising have amounted to P767.9 million and that is only for [Channel 7]. In November 2008, we had P930 million so we will definitely have higher advertising numbers,” said Mr. Gozon.

Gilberto R. Duavit, GMA chief operating officer, said “this quarter is the strongest year-end quarter we have had.”

General and administrative expenses of the company grew by 18% to P2.6 billion mainly because of higher personnel costs after management signed a three-year collective bargaining agreement with employees.

“There was a one-time payoff of P150 million to our employees, which increased our expenses by 18% in the third quarter but that would only affect us now and not in the future,” said GMA Network Chief Financial Officer Felipe S. Yalong.

Subscriptions to international channels GMA Pinoy TV and GMA Life TV totaled 600,000 as of September.

Mr. Yalong said the network was still on track toward meeting its target net income of P2.8 billion by the end of the year.

“We are confident that we can reach our target because based only on our October and November numbers, we are doing good,” he said.

Mr. Gozon pointed out that the early filing of candidacy may affect the placing of ads by political figures but said big volume advertisers are going to advertise more because of the lack of political activity.

“There would be no campaign ads in December because politicians have already filed their candidacy. The campaign period will not start until February. Politicians can’t show ads and television stations also can’t. It’s not bad because big volume advertisers cut down ad spots during elections so we are banking on these advertisers to put in ads in place of political ads,” said Mr. Gozon.

GMA Network was able to make P400 million from political ads, P300 million of which were from private entities including politicians with “advocacies.”

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