GMA Network reports Q2 revenues up 14% to P3.587B

GMA Network Inc. on Tuesday said consolidated revenues rose 14 percent to P3.587 billion in the second quarter from P3.138 billion in the first quarter, helped by advertising and better nationwide ratings. Still, the company said consolidated revenues fell 11 percent to P6.726 billion in the first half of the year from P7.564 billion a year earlier in the absence of political advertising that marked the network’s robust financial results in the first half of 2010. Quarter-on-quarter, GMA Network’s net income after taxes slipped by 13 percent to P521 million. GMA Network chairman and CEO Atty. Felipe Gozon, however, noted that revenues in 2011 were off to a much better start than it did in the beginning of 2008, a year unaffected by the presence of political advertisements. "In 2010, we increased our effective rates very substantially, but it did not affect the load so much because the timing of the increase happened in 2010, when there was an election," Gozon explained. "Advertisers got used to our relatively higher prices already in 2010, so it did not affect the load so much in 2011," he added. Gozon said revenues last July increased by 36 percent year-on-year. He noted that July 2010 was no longer affected by political advertisements. Higher revenues in July were influenced by a combination of higher rates and ad placements, but it was more of the latter, Gozon said. The company will keep its 2011 targets, but GMA president and COO Gilberto Duavit Jr. said they are not dismissing the possibility of exceeding their targets. "The revenues in July and the placements we've already received as early as today indicate that improvement in the third quarter will be quite substantial," Duavit said. Robust brand performance In the first quarter of the year, top performing business unit Channel 7 raked in P3.093 billion in revenues, up by 14 percent quarter-on-quarter. Newly launched GMA News TV 11, on the other hand, delivered some P58 million to the network, up 30 percent. GMA Regional TV posted P46 million in revenues, up 38-percent, while GMA Radio raked P97 million, up 15 percent quarter-on-quarter. Despite the appreciation of the peso which tends to water down revenues from international markets, GMA International proved to be a strong brand and made P239 million in the second quarter, up 4 percent from P230 million. Subscriptions for GMA Pinoy TV (GPTV), meanwhile, totaled 279,000 worldwide while GMA Life TV (GLTV) kept a stable 121,000-user base. Global expansion Despite the tapering effects of the US recession, the disasters in Japan and the political turmoil in the Middle East and North Africa, GMA Network said its international channels remained competitive with an estimated 1.85 million viewers for GPTV and 1 million for GLTV. Meanwhile, GMA International's newly launched channel, the international edition of GMA News TV, is now available in Japan, Australia, Guam and Papua New Guinea. Popular employment destinations of overseas Filipino workers in the Middle East and North America will soon be added to the list, the company said. GMA Worldwide Inc., GMA's syndication sales and acquisition arm, also reported P8 million in revenues on the back of stronger sales in China, Nigeria, Vietnam, Malaysia, Singapore and Cambodia. Company officials noted that syndicated shows — often imbued with cultural undertones — were aired a few years earlier, and current shows like Amaya, which depict pre-Hispanic Philippine culture, could also be marketed in the future. Achieving targets Total operating expenses in the period grew 16 percent as the company realigned its programming benchmarks especially for primetime productions such as Amaya and Captain Barbell. General and administrative expenses, meanwhile, increased by 12 percent to P1.022 billion due to higher personnel cost and the ramped-up promotional campaigns the network undertook nationwide. GMA said it has already spent P459 million of its P719 million allotment for capital expenditures this year ahead of handling the challenges of digitalization as well as upgrading its facilities. "I am confident that GMA will deliver even much better performances in both ratings and revenues in the second half of 2011," Gozon said. "In the opening of the second semester in July, GMA increased revenues by over one third of the amount made last year and pulled further away in nationwide ratings versus ABS-CBN." Dominant ratings GMA Network was able to keep its lead in the National Urban Television Audience Measurement (NUTAM) over chief competitor ABS-CBN, as it ended the quarter with 32.4 points compared with the latter's 32.3 points. "[This is] a strong performance given that for the same period in 2010, ABS-CBN was ahead of GMA by double digits," the company added. In Luzon, which comprises 77 percent of all television households nationwide, GMA Network registered 36 points, or 8.4 share points ahead of ABS-CBN's 27.6 points. In viewer-rich Mega Manila, GMA Network maintained its No. 1 ranking with a 10.5-gap in household shares (36.8 points) compared with ABS-CBN's 26.3 points and TV5's 17.4 points. The Nielsen TV Audience Measurement — where household data comes from — translates one point in NUTAM to 90,890 households and 421,530 viewers. For the partial figures in July, GMA Network further widened its lead over ABS-CBN by 2.9 points with 34.4 household share points. Based on an estimated five viewers per household, the point difference translates to as much as 500,000 more viewers nationwide who watch GMA Network shows rather than those of ABS-CBN, and 3.5 million more viewers than TV5. For Urban Luzon, GMA Network was able to capture 38.2 points compared with ABS-CBN's 26.7 points and TV5's 16.6 points. In Mega Manila, meanwhile, GMA Network's lead was wider at 38.8 points or 13.3 points higher than ABS-CBN and 21.5 points more than TV5. — VS, GMA News