ABS-CBN Corp. announced on Tuesday that it cut its net loss for 2021 to P5.67 billion from a loss of P13.53 billion previously, mainly due to lower expenses resulting from the cessation of some of its businesses and content production.
The media company saw its total revenues decline 16.8% in 2021 to P17.8 billion from P21.42 billion in the previous year, its full-year financial report showed.
Broken down, its advertising revenues fell by 25% to P5.29 billion in 2021 from P7.06 billion in 2020, while consumer sales went down 12.7% to P12.53 billion from P14.36 billion in the previous year.
The decline in advertising revenues is “attributable to the absence of the company in the free-to-air advertising space following the cease-and-desist order issued by the National Telecommunications Commission (NTC) on the company’s broadcast operations on May 5, 2020 and the eventual adoption of a resolution denying the franchise application of the company by the House Committee on Legislative Franchises on July 10, 2020,” ABS-CBN said.
“The cease-and-desist order similarly affected consumer sales as this prohibited the company from engaging in Sky Cable’s DTH (direct-to-home) services and distribution of TV Plus Boxes,” it added.
At the same time, the company said that the impact of the coronavirus pandemic resulted in the company “being unable to generate revenues from concerts and events as well as box office receipts.”
The health crisis also resulted in the “cessation of various ancillary operations such as Heroes Burger, Kidzania Manila, and Studio XP.”
ABS-CBN’s costs and expenses decreased 32.8% to P23.26 billion in 2021 from P33.55 billion previously.
Broken down, production costs fell by 30.6% to P7.15 billion from P10.31 billion in 2020, while the cost of sales and services fell 15.8% to P7.93 billion from P9.42 billion in the previous year.
The company’s general and administrative expenses dropped 46.1% to P8.17 billion from P13.82 billion in 2020.
“In compliance with the directive by the Office of the President of the Philippines imposing stringent social distancing measures on March 15, 2020, the company ceased production of content the same day. This production stoppage was further extended after the cease-and-desist order was issued by the NTC to the company,” ABS-CBN said.
“Instead, the company decided to align the number of programs based on partnerships closed by the company with various free-to-air operators. This alignment resulted in a reduction of production costs… Due to the cumulative im-pact of the COVID-19 (coronavirus disease 2019) outbreak and the cease-desist order issued by the NTC, the company was forced to cease its food & beverage, live experiences, TV plus and DTH business operations,” it added.
“This, in turn, resulted in a reduction in the cost of sales and services… Following the events of the franchise denial and the impact of COVID-19, the Company enforced stringent cost cutting measures to further manage the company’s financial performance.”
ABS-CBN shares closed 3.30% lower at P9.76 apiece on Tuesday. — Arjay L. Balinbin