Wednesday, April 11, 2012

GMA Network's Profit Drops 39% in 2011

GMA Network, Incorporated (GMA), the leading broadcast media company in the Philippines, hit consolidated revenues worth P13.083 billion in 2011.

Notwithstanding the absence of P2.054 billion worth of revenues from political advertisements generated in 2010 and the global impact of financial crisis in Europe and slow economic recovery in the US last year, the Company delivered a fairly competitive business performance.

In fact, despite the cutback in the advertising budget of top multinationals whose headquarters are based abroad, the Network’s leadership in nationwide ratings won for the Company a substantial portion of the available ad spend.

GMA Channel 7, the Company’s top performing business unit and the country’s most watched television station, posted an eight-percent revenue growth from regular advertising during the financial period versus the preceding year, more than double the gross national product (GNP) growth rate of only 3.5 percent in 2011.

The channel also raised its ad loading minutes by 2.1 percent even with rate adjustments that took effect in February of 2011. ABS-CBN, meanwhile, suffered the hardest hit by the ad spend cutback among local broadcasting companies with a 7.1-percent drop in ad loading minutes during the comparable period.
GMA Radio, with improved ratings both in the AM and FM bands, delivered a 15-percent revenue growth from regular advertising. GMA Regional TV made a 21-percent hike year-on-year in recurring ad placements.

Meanwhile, GMA International ended 2011 with a six-percent growth in revenues in US dollar terms, but the growth rate slowed down to only four percent in peso terms due to the appreciation of the Philippine peso exchange rate. Total revenues from subscription, licensing and advertising revenues made thru overseas operations reached P965 million.

GMA International runs the Network’s flagship international channel GMA Pinoy TV (GPTV) and the Filipino lifestyle channel GMA Life TV (GLTV) with estimated global viewer counts of two million and one million, respectively.

In the domestic market, GMA continues its aggressive expansion efforts with the rise of capital-intensive originating stations in Ilocos and Bicol, which will be operational by the third quarter of this year.

Total operating expenses for the financial period had a single digit growth to P8.984 billion amid higher costing programs on primetime television, and the station-wide reformatting of Channel 11 from QTV to GMA News TV.

Total programming hours of in-house produced programs aired both on GMA Channel 7 and GMA News TV substantially hiked from 2010 to 2011, causing an 11-percent growth in production costs across allbusiness segments to P5.105 billion. The aforementioned programming mix for Channel 11 drove down the amortization of program rights.

The four-percent rise in general and administrative expenses came mostly from the growth in personnel costs aligned with bonuses and merit increases to sustain competitiveness of compensationpackages.

The year ended with earnings before income, taxes, depreciation, and amortization of P3.090 billion, and net income after tax of P1.715 billion.

On television, GMA kept a significant 3.1-point lead in household audience share over ABS-CBN and a whopping 18.6-point lead over TV5 in National Urban Television Audience Measurement (NUTAM) in the previous year.

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