Cuts in the advertising budgets of multinational corporations had badly affected the profit growth of broadcast giant GMA Network Inc.
The company now expects its full-year income to fall short by as much as P1 billion.
Earlier this year, GMA said it would aim to match last year’s net income of P3 billion.
But officials on Wednesday said the final figure could be closer to P2 billion.
For the quarter ending in September, profits declined by 9.9 percent to P525 million. For the January to September period, the figure was at P1.58 billion—down 30 percent year on year due to the absence of political advertisements that provided a windfall in the first five months of 2010.
“We are down from last year. If you sum up what we’ve been able to do in the last nine months, the best we can achieve by the end of the year is a net income of about P2 billion,” GMA chief financial officer Felipe S. Yalong told reporters.
Officials said cutbacks by multinational firms coupled with tepid domestic economic growth caused by government underspending were the main reason behind the company’s sluggish performance.
“Unfortunately, there were financial crises that happened in the United States, and are still happening in Europe,” GMA chairman Felipe Gozon said, referring to the earlier debt ceiling debates in Washington and the lingering threat of a possible Greek default.
“The decisions of multinationals operating in the Philippines are made abroad,” Gozon said, adding that placements by big companies like Unilever and Proctor & Gamble made up a “big portion” of the industry’s ad revenues.
A recent AC Nielsen monitoring report likewise showed a drop in total media advertising revenues for the months of September and October, triggered by crises abroad, he noted.
Based on AGB Nielsen’s survey for the first week of October, GMA maintained a lead in nationwide ratings with an average audience share of 36.8 percent, higher than rival ABS-CBN’s 28.3 percent.