ABS-CBN, GMA Network 3rd quarter earnings decline on lower ad revenues

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MEDIA companies ABS-CBN Corp. and GMA Network, Inc. reported lower earnings in third quarter, due to a slump in advertising revenues.

In a regulatory filing, ABS-CBN said its net income attributable to equity holders of the parent company dropped 19% to P776.9 million during the July to September period.

The Lopez-led media company said its third quarter revenues grew by 4% to P10.6 billion, as advertising sales fell 2% to P5.302 billion.

For the first nine months of 2018, ABS-CBN saw its attributable net income decline by 32% to P1.627 billion.

Consolidated revenues for the January to September period was flat at P29.49 billion, from P29.51 billion a year ago. Advertising revenues also dipped 3% to P14.87 billion, while consumer sales rose 3% to P14.6 billion on a 24% rise in sales of TV Plus boxes.

ABS-CBN recorded a 5% rise in direct costs and expenses during the nine-month period at P28.190 billion. This was attributed to a 8% growth in production costs at P9.56 billion and 8.4% hike in general and administrative expenses at P8.892 billion.

Meanwhile, in a regulatory filing, GMA Network reported its attributable net income went down 4% to P738.28 million during the third quarter, as revenues declined by 5% to P3.892 billion.

During the January to September period, GMA Network reported its attributable net income slumped 15% to P1.9 billion, amid 6% lower revenues to P11.142 billion. Consolidated operating expenses dipped 2% to P8.4 billion during the first nine months.

GMA Network said its year-to-date sales from television and radio airtime, which is 88% of the company’s revenues, dipped 6% to P9.845 billion.

“[T]he contraction in airtime advertising was felt across the broadcasting industry thus providing the main drag for the revenue shortfall. Nonetheless, mixed results were seen among airtime-revenue generating platforms, Radio and Regional TV operations remained steadfast, managing to pull ahead in their topline year-on-year, while Ch-7 and GNTV-11 succumbed to lukewarm sales in between periods,” it said.

PNB Securities, Inc. President Manuel Antonio G. Lisbona said the drop in earnings for both companies only shows that advertisers are shifting to online platforms.

“Looking at both companies’ stock prices even for the last 24 months, you can see that both have been declining steadily because of this. That said, both companies have also begun shifting and diversifying into the online space,” he said in a text message on Thursday.

GMA said sales from international operations, subsidiaries and other businesses led by its digital arm GMA New Media grew 2% to P1.297 billion in the nine-month period. For ABS-CBN, its digital platforms delivered consolidated revenues of P627 million, up 46% from last year. — Denise A. Valdez