LISTED broadcast firm GMA Network Inc. is earmarking some P600 million in capital expenditure (capex) next year, the bulk of which will be spent to improve facilities and infrastructure.
GMA chairman Felipe Gozon said on Wednesday night that three to four local stations will be put up in 2012 along with a plan to construct a new sound studio. The total cost will be included in next year’s capex, he said.
“We are not yet finished with our budget planning but it’s going to be around P600 million. The cost to open an original local station is very close to P100 million each. Also, we will start construction of our new sound studio in Tandang Sora, Quezon City,” said Gozon.
GMA also plans to put up local stations in the provinces of Ilocos, Batangas and possibly Cagayan de Oro in 2012.
Gozon said construction for the new sound studio, which will sit on a 2,000-square meter property, will begin next year too. Another P100 million is earmarked for the construction of the said studio.
The GMA executive added that said that despite strong TV ratings its profit for the fourth quarter is going to be as “bad” as the previous quarter because ad revenue remains weak and is lower than last year. “In the third quarter, we were hoping to recover in the fourth quarter but that did not happen. Our third and fourth quarters were lower than in the third and fourth,” he said.
GMA posted a net income of P525 million in the third quarter; P521 million in the second quarter; and P534 million in the first quarter.
Gozon expects profit for the month of December “will not even reach P800 million” while for October and November the profit for each month was “very close to P1 billion.”
“The whole industry load went down as an effect of the crisis in Europe and in the US. Our advertisers are mostly multinational companies like Unilever, Procter and Gamble, Johnson and Johnson and Pfizer. Their head offices are located there and the decision to place ads is made there. There is nothing wrong with our ratings. It’s really the money available for ads,” said Gozon.
This year, GMA is expected to post only P2 billion in net income. As of end-September, its net income fell to P1.58 billion from P2.27 billion in the same period last year. Revenues also dipped by 7 percent during the first nine months of the year to P10.10 billion from P10.87 billion.
In 2012, GMA’s thrust is to increase revenues and reduce cost. Gozon said the broadcast firm has reason to be optimistic in 2012 given its increasing lead in nationwide ratings.
“We are in a better position now because our ratings went up. When we started 2011 we were behind in ratings but now we are going to start 2012 with better ratings. However, we can’t answer for the economic situation which directly affects the amount of budget,” he said.
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