GMA Network pumps up new subsidiary to attract more revenues | Inquirer Business
FIRM EXPECTS TO BEAT 2021 PROFIT GOAL

GMA Network pumps up new subsidiary to attract more revenues

/ 05:10 AM December 10, 2021

Television broadcast giant GMA Network Inc. expects to beat its profit target this year while boosting the capital of a new subsidiary that will invest in startups by 1,900 percent to P1 billion as it bets on new revenue streams.

GMA’s evolving strategy, through GMA Ventures Inc., would help the company deliver “more revenues and net income for our stockholders,” chair and CEO Felipe Gozon said on Thursday.

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Gozon shared few details during the company’s special stockholders’ meeting, revealing they had invested in “one or two so-called startup companies” and that other offers were being evaluated.

Risky investments

Once averse to making risky new investments, GMA has since changed its stance when it announced the establishment of GMA Ventures earlier this year to focus on noncore businesses outside TV.

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“If a good opportunity presents itself for the company to earn considerable revenues and net income, even if that will require the investment of a substantial amount, then [GMA Ventures Inc.] can invest in it, provided not much risk is involved in the business to be invested on,” Gozon said on Thursday.

GMA stockholders approved the infusion of an initial P100 million into GMA Ventures and gave further authority to its executive committee to increase this to the full amount of P1 billion for future investments.

Gozon also assured stockholders that future dividend payouts would not be affected given that GMA had no long-term debt and cash flow remained “very healthy.”

GMA has seen its year-to-date share price skyrocket as much as 176 percent to P16.60 last October following a major earnings boost and dividend declaration that came after President Duterte ordered the shutdown of main rival ABS-CBN Corp.’s free-to-air broadcasts in 2020.

For 2021, Gozon said they would exceed the previous target to grow net income by 15 percent over the previous year, when GMA recorded a 128-percent profit surge to nearly P6 billion.

He said GMA would continue to invest in content production, talent management and development while expanding its presence in digital TV and the overseas Filipino market.

He added the TV business would remain strong in 2022 with the upcoming presidential elections.

Gozon explained that recurring and nonpolitical related advertising would provide the bulk of ad sales next year. He said political ads in 2019 accounted for about 5 percent of total sales and the company was expecting a similar figure next year due to the impact of the pandemic and caps imposed by the Commission on Elections on political advertising rates.

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