ABS-CBN Core Net Income Jumps 37% in 2009 to P1.79 Billion

The core net income of ABS-CBN Broadcasting Corporation (ABS-CBN), the country’s largest multimedia conglomerate, jumped by P481 million or 37% to P1.79 billion in 2009.

ABS-CBN delivered consolidated revenues of P24.85 billion from advertising and consumer sales, posting an increase of P2.54 billion or 11% year-on-year, inclusive of full-year revenue contribution from Sky Cable totalling P3.72 billion. Sky Cable contributed P3.58 billion to consumer sales and P138 million to airtime revenues.

The Company’s fast-growing consumer sales businesses continued to raise their overall share of revenues, reaching 42% of consolidated revenues in 2009 from double-digit growth in the subscription businesses of ABS-CBN Global and in the contribution of Sky Cable.

Consumer sales in 2009 rose by P1.59 billion to P10.39 billion, an 18% rise over 2008 consumer sales of P8.80 billion. ABS-CBN Global’s contribution share to total consumer sales amounted to 51%, while Sky Cable’s contribution share increased to 34% with its subscription and service revenues contribution of P3.58 billion, which is P1.0 billion more than its three-quarter revenue contribution in 2008.

Despite a weak first quarter and a six-month deferral of airtime rate increases to August 2009, consolidated advertising revenues grew by P952 million or 7% year-on-year to P14.46 billion, with 92% coming from Channel 2, Manila Radio and the Regional Network Group.

Total expenses grew by P2.52 billion or 13% year-on-year to P22.40 billion, driven mostly by higher costs of sales and services and general and administrative expenses (GAEX), with an additional quarter of expenses from Sky Cable. Total production costs in 2009 rose by only 2% or P133 million, to P6.29 billion.

A tight control over operating expenses and prudent financial management resulted in core net income reaching P1.79 billion in 2009, 37% or P481 million higher than the P1.31 billion posted in 2008.

Net income attributable to shareholders for 2009 went up by 23% year-on-year or P318.93 million, to P1.70 billion, from 2008’s net income attributable to shareholders of P1.38 billion,after an P85.25 million accounting adjustment required under Philippine Financial Reporting Standard 3.

Earnings before interest, taxes, depreciation and amortization (EBITDA) reached P6.51 billion, yielding an EBITDA margin of 26% for 2009, and is 7% or P405 million better than 2008 EBITDA of P6.11 billion. Capital expenditures and film and program rights acquisitions in 2009 amounted to P2.95 billion, just P33 million or 1% higher from the previous year.

Even amidst weak economic conditions and depressed consumer spending in major economies worldwide, ABS-CBN Global’s overall viewer count increased by 13% to an estimated 2.16 million worldwide by year-end. Driven by strong double-digit subscriber growth in the United States, the Middle East, Australia, Canada and the Asia-Pacific, ABS-CBN Global’s subscription and other service revenues grew 8% year-on-year in US dollar terms and by 16% growth in peso terms.

Sky Cable’s digitalization of its cable network and roll-out of Digiboxes to 50% of its Metro Manila subscribers in 2009, enabled it to address cable piracy, offer the country’s first pre-paid cable TV packages, as well as introduce Skycable Select, a low-priced post-paid cable TV package that allows subscribers to add more channels to their basic subscription an a la carte basis.

Sky Cable also expanded its product portfolio with the launch of Sky Broadband, the fastest residential broadband service with speeds of up to 12 Mbps, and Sky Voice, the most affordable international voice-calling service, and pioneered the offering of HD-quality cable TV content in the Philippines with Sky Cable HD in 2009.

ABS-CBN sustained its dominance in local television in 2009 with its heart-warming and inspiring dramas, light and amusing comedy shows, and engaging reality programs in the afternoons and on primetime, such as the Precious Hearts Romances drama mini-series, Kambal sa Uma, May Bukas Pa, Tayong Dalawa, Katorse, Showbiz News Ngayon, Banana Split and Pinoy Big Brother Double Up, along with the long-running daily noontime show Wowowee and Sunday musical variety program ASAP. This high-quality entertainment fare was complemented by relevant weekday and weekend news and current affairs programs — Umagang Kay Ganda, TV Patrol World, Bandila, Matanglawin and Rated K!, among others — highlighted with special coverages and documentaries of issues and events of national importance.

With such compelling and engaging content, the ABS-CBN programs held the first nine of the Top 10 and fourteen of the Top 20 programs in 2009. ABS-CBN solidified its national leadership position based on TNS National Philippines Television Audience Measurement, with audience shares for the period February to December 2009 averaging 45% for total day (6am to 12mn), leading its nearest competitor with a comfortable double-digit margin.

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