GMA Network says Q1 net income rose 71% to P855M

(Update: 4:15 p.m.)GMA Network Inc. said on Wednesday its net income in the first quarter rose by almost two-thirds driven by revenues from political advertisements in the run up to the May 10 elections. Its net income in the first quarter grew by 71 percent to P855 million from P501 million a year earlier, the company, whose shares are traded on the Philippine Stock Exchange said in a statement Wednesday. Political advertisements backed up by revenue increases across all business units pushed GMA’s consolidated gross revenues from January to March to breach the P3-billion mark and settle at P3.625 billion - up by 37 percent P2.651 billion in the first three months of 2009. Revenues from political ads alone from January to May 8 – the last day of the campaign – amounted to about P1.85 billion, GMA chairman, president, and CEO Felipe Gozon said in a briefing on Wednesday. “I am satisfied with the network's performance for the first quarter. Even without the political ads, we would still post modest gains in net income because of our operational efficiencies," Gozon said in a statement.

GMA Network President, Chairman and CEO Felipe L. Gozon (center) and Gilberto R. Duavit, Jr., EVP and COO (left), talk to the media after the company's annual stockholders' meeting in Quezon City on Wednesday. Also in photo is CFO Felipe S. Yalung. Vic Eyatid

Its earnings before interest, taxes, depreciation, and amortization, or EBITDA, rose by 57 percent to P1.41 billion from P902 million in the same comparable period. GMA said the network’s assets grew by over a tenth to P14.82 billion, with liabilities up by 8 percent to P3.09 billion. Higher production costs, however, pushed the network’s operating expenses up by a fifth to P1.93 billion. The network’s international units also posted gains, with GMA International’s subscription revenue reaching P235 million, or nearly a third up year-on-year on the back of a 19-percent rise in subscriber count to 250,000 for overseas channel GMA Pinoy TV (GPTV). About 120,000 of GPTV subscribers also subscribe to GMA Life TV (GLTV), a second international channel airing lifestyle shows from the network’s local unit Q Channel 11. GLTV said its subscribers grew by 7 percent. The subscriber counts for GPTV and GLTV were equivalent to 1.5 million and 800,000 viewers, respectively, the network said.1 GPTV was recently launched in Canada, as well as Alaska, Colorado, Florida, and Texas in the US. GLTV was also introduced in the states of Colorado, Central California, Texas and Florida, and in the China’s Hong Kong. Both channels have already penetrated other parts of the US, Canada, Europe, Middle East, North Africa, Australia, New Zealand, Japan, Guam, Papua New Guinea, Singapore, and Hong Kong. “[We have continued to expand our international operations] by signing a corporate agreement with Time Warner Cable and expanding into Comcast Systems. Although our international business has so much potential, napakasayang malaman na mas marami sa ating kababayan sa iba't ibang sulok ng mundo ay mga kapuso na natin (it is heart-warming to know that more of our compatriots are subscribe to our network)," Gozon said during the GMA’s stockholders’ meeting on Wednesday. Network officials said several program replacements are lined up for the year. “What we've done more proactively was to look at the key areas of opportunity. [Looking] at the programming grid, we see there are programs that falling below internal ratings benchmarks. There are a significant number of program replacements in line for us," Chief Operating Officer Gilberto Duavit, Jr. said at a briefing on Wednesday. In the Philippines, GMA Network continued to expand its signal and facility projects, particularly in Matina (Davao City); Roxas City (Capiz); Dipolog (Zamboanga del Norte); Ozamis City (Misamis Occidental); San Jose City (Occidental Mindoro); and Kalibo (Aklan). It also upgraded its projects in Virac (Catanduanes); Ormoc City (Leyte); Tagbilaran (Bohol); Santiago City (Isabela); and Jala-jala (Rizal). The network said its engineering unit is exploring digital terrestrial television, a new technology that the company intends to incorporate in its operations. “We are very much encouraged by the progress we had been making in all areas of our operations. The improvements in our financial position have allowed us to fulfill our commitment to our shareholders and provided them with better returns," Gozon said. The company paid P2.19 billion in dividends in 2009, which was equivalent to 77 percent of GMA's total net income after tax of P2.08 billion. “We shall continue to pursue new initiatives to achieve further growth from our international and regional operations, film ventures and syndications, and other businesses. We will always aim for the better and we have performed creditably well not only this year but also in the past year," Gozon said. GMA said it will keep its 10-percent target growth for 2010, but that the higher-than-expected first quarter income might call for a rise in its year-end target. “We miscalculated the first quarter earnings up to May. The actual results directly exceeded the projection so that that will [change] the total projection for the rest of the year," Gozon said. “...Given that [earnings went] higher than expected, we have to. But as of now we are still maintaining that 10-percent target," corporate treasurer Felipe Yalong added. —VS, GMANews.TV