ABS-CBN net profit down 24% to P2.4B in 2011
Profits of multimedia giant ABS-CBN Corp. fell nearly a quarter in 2011, in line with an industry-wide drop in earnings due to massive spending cuts by big advertisers and the absence of political campaign placements.
A one-time gain from the sale of a stake in Sky Cable Corp., coupled with the company’s more diversified revenue stream, helped save ABS-CBN from a more significant decline. The outlook for 2012, however, remains uncertain as officials said the first three months of the year have been unusually erratic.
“In January, ad minutes were down by double digits. By February, we were seeing signs of recovery but last March, we had an all-time high for that month,” ABS-CBN chief financial officer Ron Valdueza told reporters Friday. “We hope we can sustain the momentum for the rest of the year.”
Valdueza said the company might benefit from the unofficial start of the mid-term campaign season by the fourth quarter of this year, “but it won’t be that much.”
For 2011, ABS-CBN’s net profit fell to P2.4 billion, down 24 percent from P3 billion during the 2010 election year.
This came as the company generated consolidated revenues of P28.2 billion from advertising and consumer sales, a 13-percent decline compared to 2010. Stripped of the windfall from political advocacy and advertisements in 2010, the company’s consolidated revenues for 2011 declined 4 percent year-on-year.
ABS-CBN’s advertising revenues reached P17.6 billion, a decline of 19 percent from a year ago. Minus the revenues from political advocacy and advertisements in 2010, advertising revenues declined 6 percent year-on-year. “This decrease is attributable to a slowdown in advertising spending by corporations,” the company said.
Advertising budgets of multinationals operating in the country were cut due to economic troubles in their home markets.
Total operating and other expenses dropped P1.1 billion or 5-percent year-on-year to P22.3 billion. “This was partly a result of lower cost of sales and services, and general and administrative expenses as the company continued its effort to manage and control expenses,” the company said.
The decline in both expense accounts partly offset the increase in total production costs due to the company’s drive to produce quality and innovative programs, ABS-CBN said.
