GMA 7 income in ’13 hit P1.67B, up 3%

GMA Network Inc., operator of one of the country’s biggest television networks, said profit last year rose by just 3 percent to P1.67 billion, in line with a reduced internal estimate, as costs increased and revenues slowed.

GMA, whose core channel is GMA 7, said in its annual report that 2013 revenues rose 7 percent to P12.95 billion, with about 91 percent of that coming from television and radio advertising.

Gains were tempered by an 8 percent increase in operating costs to P10.57 billion, it added.

Like chief rival ABS-CBN Corp., GMA’s revenues benefited from a boost in election-related advertisements last year amounting to P724 million.

Without this, airtime revenue would have increased by just 1 percent, it said in its report.

ABS-CBN had separately said that advertising revenue from election-related material contributed about P1.2 billion to its P18.9-billion advertising revenue.

GMA’s bottom line performance was expected as company officials started managing investors’ expectations last November, after announcing in early 2013 that full-year profit would end about 10 percent higher.

By November last year, GMA officials said they were looking at flat growth for the full year from a net income of P1.6 billion in 2012, citing rising expenses needed to “diversify and strengthen” its content amid stiff competition.

In its 2013 annual report, GMA said production costs, accounting for over half of total expenses, jumped 13 percent.

“Primetime weekday programs this year [2013] were more costly,” GMA said, citing high-budget series Indio apart from more in-house produced shows.

“Lastly, the comprehensive and timely delivery of the election coverage this year resulted in incremental expenses which also saddled this year’s production costs,” GMA said.

GMA also noted that it was continuing to seek ways to improve efficiency.

“The company has established systems and procedures to monitor costs and measure efficiency and has launched various initiatives and activities in relation to these efforts,” the filing showed without elaborating.

GMA, which uses data from Nielsen TV Audience Measurement, claimed a lead last year in viewer-rich Urban Luzon and Megamanila.

From January to December 2013, GMA recorded an average total day audience share of 36 percent in Urban Luzon, which makes up 76 percent of the total urban television households in the country.

ABS-CBN ranked 30.8 percent.

It also dominated Mega Manila with a 37.2 percent average total day audience share against ABS-CBN’s 28.8 percent, the company said. Miguel R. Camus