Despite posting lower profits, ABS-CBN Corp. has set a higher budget for expansion this year as it diversifies its revenue stream to ensure future growth.
A top company official said the group’s capital expenditures (capex) would increase by at least 19 percent this year to P5 billion, with the bulk to be invested in subsidiary SkyCable’s Internet and cable television business.
“Last year, the capex for SkyCable was P1.3 billion. This year, it will be P2 billion,” ABS-CBN chief financial officer Ronaldo Valdueza said in an interview.
He said ABS-CBN would also allot more money for the acquisition of film rights. Last year, the company launched a total of 16 films, six of which grossed more than P100 million each to reach “blockbuster” status in Philippine standards.
Most notable of the movies launched last year was “Praybeyt Benjamin,” which grossed P342 million, making it the country’s highest-selling movie. Valdueza said about P1 billion would be spent for the acquisition of film rights.
He said that about P1.2 billion would be earmarked for the expansion of ABS-CBN’s network reach. This was lower than the P1.5 billion spent last year, but Valdueza said this was because the company would focus more on the growth of its digital television network.
The government has plans to order television industry players to start broadcasting on digital frequencies and replace inefficient and unreliable analog technology. ABS-CBN said it would spend P700 million for its digital TV rollout.
Valdueza said the company would invest more once the government chooses the digital TV standard to be used in the country. The National Telecommunications Commission (NTC) is choosing between Japan’s Integrated Services Digital Broadcasting and the second-generation Digital Video Broadcasting platform from Europe.
Last week, ABS-CBN reported that its net profit fell to P2.4 billion for 2011, down 24 percent from P3 billion during the 2010 election year.