Political ads boost earnings of top broadcast networks
The country’s two largest television networks booked better-than-expected first-quarter earnings due to the spate of political advertisements, company officials said Wednesday.
ABS-CBN Corp. and GMA Network Inc. on Wednesday released their first-quarter results, showing strong double-digit growth in terms of net income.
GMA said net income during the period jumped 55 percent to P603 million, while ABS-CBN reported a 66 percent surge to P508 million, officials of the two companies announced in separate briefings.
For GMA, consolidated revenues were up 24 percent to P3.24 billion, driven by airtime revenue, which climbed 26 percent to P2.95 billion during the quarter. It said 14 percent of revenue growth came from recurring advertisements, while political advocacies and advertisements accounted for 12 percent.
ABS-CBN also reported a similar boost, with total revenues jumping by 21 percent to P7.9 billion. Airtime revenue also increased 22 percent to P4.4 billion. Taking out political advertising, airtime revenue went up by 12 percent during the quarter.
The boost from political ads is expected to spill over into the second quarter results, covering the final stretch of the midterm elections held on May 13.
ABS-CBN and GMA are likewise targeting higher earnings for the full year on expectations that double-digit growth in recurring advertising will continue.
“The preference is really to look at recurring revenues. Even if political ad assumptions were stripped out, we are targeting substantial growth from the previous year,” said Giberto Duavit Jr., GMA president and chief operations officer.
ABS-CBN, on the other hand, estimated that full-year net income would hit P2 billion, up by roughly 17 percent from 2012, chief financial officer Rolando Valdueza said.
The company booked about P300 million in political advertisements in the first quarter. That figure may rise to P1 billion once second quarter figures are factored in, he said.
