TV5 losses double to P4.1B in 2011
MANILA, Philippines—Amid cutthroat competition in the broadcasting industry, the country’s third-largest television network doubled its losses last year as it tried to compete head on with its larger rivals.
According to financial statements filed by ABC Development Corp. — parent company of TV5 — the company lost P4.14 billion at the end of 2011, representing a 91-percent increase from its net loss of P2.16 billion the previous year.
In contrast, industry leaders ABS-CBN and GMA Network reported net incomes of P2.4 billion and P1.71 billion, respectively, for 2011.
The dramatic increase in the losses of the network controlled by Manuel Pangilinan comes as his group is trying to acquire the country’s No. 2 player, GMA Network Inc., in a bid to better compete with industry giant ABS-CBN Broadcasting Corp.
Talks between the Pangilinan group and GMA Network’s controlling shareholders — the Gozon, Duavit and Jimenez families —are reportedly ongoing, but both sides have so far failed to agree on a price for the country’s second-largest network.
Sources have said that Pangilinan had initially balked at the P65-billion selling price initially quoted by GMA’s owners, although Pangilinan lately signaled that a deal may be in the offing before the end of the year.
During the same period, TV5’s asset base also grew to P8.84 billion from 2010’s level of P5.41 billion as the network invested more in broadcast equipment to upgrade its older apparati. However, its level of receivables — unpaid obligations by its clients — also ballooned in 2011 to P1.14 billion from only P443 million in the previous year.
Total liabilities of the network also grew sharply, hitting P6.45 billion last year, from only P2.52 billion in 2010 as it borrowed more cash to fund its expansion.
TV5’s financial statements filed with the Securities and Exchange Commission reveal that total revenues grew sharply to P2.31 billion last year, representing a 164-percent growth over the P875 million in sales recorded in 2010.
However, the benefit of higher sales figures were negated by the increase in TV5’s production costs, which hit P3.76 billion in 2011. This was 105 percent higher than the total production costs of P1.83 billion in 2010, as the company attracted talents from rival networks — like Sharon Cuneta and Derek Ramsay — with large, multi-year contracts.
TV5 president Ray Espinosa had yet to respond to Inquirer’s request for comment on the network’s losses for 2011 as of press time Saturday.
Last month, PLDT group officials said they expected TV5 to break even by 2014.
Espinosa, meanwhile, said he expected the network to have a 30-percent market share by 2015, double the present level of 15 percent.
The network is spending an additional P6 billion for a new corporate headquarters and studios in Mandaluyong City which it expects to be completed later this year.
ABC and its TV5 network are owned by the PLDT group’s Mediaquest Holdings, which also holds a minority stake in the Philippine Daily Inquirer.