Corporate News

Election-related ads boost ABS-CBN earnings in 2016

Posted on March 21, 2017

BROADCASTING giant ABS-CBN Corp. saw its earnings up by more than a third last year, as election-related advertising drove revenues higher.

ABS-CBN Chief Financial Officer Aldrin M. Cerrado on Monday said the Lopez-led media and entertainment company recorded P3.5 billion net income in 2016, up 39% from the P2.5 billion in 2015.

“We are very pleased to have exceeded our earnings guidance for 2016. Full year growth in advertising revenues, boosted by election-related spending, was about 11%,” Mr. Cerrado said, referring to its target of between P3.2-P3.5 billion.

Net income attributable to the parent firm also rose 34% to P3.9 billion from P2.9 billion, as consolidated revenue stood at P41.6 billion last year, up 9% from the previous year’s P38.3 billion.

Broken down, ABS-CBN revenues from ad sales went up 11% to P23.65 billion from P21.26 billion boosted by election-related spending, while revenue from its consumer business -- which includes ABS-CBN events, theme park Kidzania, home shopping service O-Shopping, and ABS-CBN store -- jumped 6% to P17.98 billion from P17.01 billion.

Revenue from domestic operations increased by 11% to P35.67 billion from P32.2 billion, while revenues from international operations fell slightly to P5.96 billion from P6.078 billion the year prior.

For the fourth quarter, ABS-CBN’s net income dropped 8% to P677 million from the P734 million in the third quarter. Revenues in the October to December period went up 3% to P10.46 billion from P10.17 billion in the July to September period.

In the fourth quarter, the network giant said its ad sales stood at P5.33 billion, while income from consumer stood at P5.49 billion.

By segment, ABS-CBN said operating revenues from media networks and studio entertainment saw a 7% uptick to P30.56 billion, while cable, satellite and broadband went up 8% to P8.76 billion. Digital and interactive media’s operating revenues went up 10% to P781 million, while consumer products and experiences saw a surge to P1.52 billion in 2016 from P971 million in 2015.

In its free-to-air business, ABS-CBN reported a 15% rise in its advertising revenue last year to P22.4 billion from P19.4 billion. Total assets rose to P72.7 billion as of the end December 2016 compared to P69.9 billion in 2015.

Based on Kantar Media national TV ratings covering both urban and rural homes, the top 10 programs for 2016 for free-to-air television were all produced by ABS-CBN, led by FPJ’s Ang Probinsyano.

“Our continued strong leadership in national audience share was also a key contributor to our record performance because improved ratings now translate to increased revenues. We have also been able to manage our costs and expenses efficiently,” Mr. Cerrado said.

ABS-CBN’s Group Chief Finance Officer Rolando P. Valdueza said the media giant is “extremely happy” with the performance of its subsidiaries last year.

“The healthy growth in our advertising revenues coupled with the accomplishments of our different business units enabled us to deliver record earnings performance for ABS-CBN,” Mr. Valdueza said during Monday’s press briefing.

In particular, he reported ABS-CBN’s movie arm Star Cinema generated over P2.9 billion in ticket sales both here and abroad, as Super Parental Guardians, released last November, brought in more than P600 million in ticket sales, making it the highest-grossing Filipino film.

SkyCable, meanwhile, saw an 8% growth in revenues, driven by the introduction of SkyDirect, its newly launched Direct-to-Home Pay TV offering, and the continued sharp increase in its broadband subscriber base. By year-end, the company had over 112,000 SkyDirect subscribers and more than 200,000 broadband subscribers, bringing Sky’s total subscriber base to over one million.

ABS-CBN’s The Filipino Channel (TFC) is now being watched by over three million Filipinos abroad, while Kidzania, the company’s educational theme park, has attracted over 360,000 visitors for 2016, while its TV shopping channel O Shopping generated over P820 million in sales.

The network giant’s capital expenditures reached P7.7 billion, of the P8.8 billion budgeted for 2016.

Shares in ABS CBN slipped 0.97% on Monday to close at P46 apiece. -- Imee Charlee C. Delavin