GMA NETWORK, INC.’s second-quarter attributable net income rose 31.7% to P826.36 million, boosted mainly by lower production costs and partly by a shift in advertising placements from rival ABS-CBN Corp.

In a regulatory filing on Monday, the network reported a 21.8% fall in revenues to P3.22 billion compared with the P4.12 billion posted in the same period last year.

The decline came despite the impact of the coronavirus quarantine restrictions on operations, as it cut production costs by 60% to P677.87 million, resulting in a 5.4% rise in the company’s gross profit to P2.54 billion.

The network said it also benefited from the absence of ABS-CBN’s broadcast operations whose legislative franchise expired in May.

Shares in GMA Network on Monday climbed 3.25% to close at P5.09 apiece.

“The shift in advertising placements resulting from the closure of the Company’s biggest and closest competitor (ABS-CBN) due to the expiration of its free-to-air broadcast franchise in early May provided some incremental revenues,” it said.

The network’s advertising revenues in the second quarter, when it started to receive advertisers from ABS-CBN, stood at around P2.96 billion, 8.9% lower than the P3.25 billion previously.

“The biggest drag came from the absence of political advocacies and advertisements this year, aggravated by the onset of the coronavirus pandemic or lockdown, which disrupted the business landscape across countries,” the network said.

“Meanwhile, this was partly cushioned by the improvement in online advertising sales, which grew by 23% during the first half of 2020,” it added.

In the first half, the company posted an attributable income of P1.4 billion, up 4.5% from the previous year, despite a 14.7% drop in gross revenue to P6.75 billion.

The network’s first-quarter net income declined 19.8% to P574.67 million. Total operating expenses decreased 4.3% to P2.69 billion.

GMA Network Chairman and Chief Executive Officer Felipe L. Gozon said last month the network would defer 30% or around P376 million of its capital expenditure (capex) budget for this year due to the pandemic.

In a disclosure to the stock exchange on June 30, the network said it had set a capex of P1.22 billion this year, which will be financed by internally generated funds.

The network is planning to launch more digital channels this year.

Mr. Gozon also said GMA is free of debt as of end-March, emphasizing its “ability to balance ratings growth with sound financials.” — Arjay L. Balinbin

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