GMA Network grows 2012 revenues by 6%, sees better results in 2013

(Updated 3:23 p.m.) Listed GMA Network Inc.'s consolidated gross revenues grew 6 percent year-on-year to P13.929 billion in 2012, the broadcast giant reported Friday. For the period, the Network raked in a 7 percent growth in airtime sales to P12.703 billion comprising 91 percent of gross revenues.   GMA Chairman and CEO Felipe Gozon said the company is expected to deliver better financial results this year, as evidenced by its strong financial performance at the opening of the year.   “The first two months have been exceptionally strong with GMA Channel 7 hitting an all time high in February alone,” said Gozon. “We intend to keep this momentum as we anticipate sustained revenue growth across all platforms.” In a briefing at GMA Network Center in Quezon City on Friday, Gozon disclosed the company is expecting to surpass 2012 revenues this year, citing gains from recurrent advertisers.   “You might think this is because 2013 is an election year and after May 13, there will be no more election poll ads (political advertisement). But in our case, poll ads as percentage of total sales is 8- to 9- percent only. It is really the recurring advertisers that are increasing their placement,” he explained.   “Maybe because they see the Philippine economy growing and they want to take a piece of that action,” he added. Q1 2013 revenues up   Gozon likewise disclosed that first quarter revenue for this year will surpass year earlier numbers.   “March 21 sales…  is about 35 percent greater than the same period last year… As of yesterday, our gross sales was already P1.180 billion—that’s for March... Last year the, whole of March was only P1.097 billion,” he said, adding that in the first two months of 2013, GMA sales posted a 32 percent increase year-on-year.   On Thursday, GMA declared P1.215 billion in cash dividends. “All I know is that it is going to be a good year for us… We are really very optimistic and confident that even if we use part of the first quarter net income [as part of the dividends], there will be enough left in the second, third and fourth quarter to make our stockholders happy,” Gozon added.   GMA’s flagship Channel 7 drove the increase in 2012, registering a 7 percent rise in incremental sales on consistent nationwide leadership.   Revenues from Regional TV—GMA’s regional TV operations unit—surged 25 percent supporting the company's revenues on various expansion and improvement efforts in different areas nationwide. Leading local channel GMA News TV gained a modest 2 percent increase in its top line in the second year of operations while airtime revenues from radio dropped 3 percent.   GMA International, which manages the Network’s operations and distribution of international channels, sustained the subscriber uptake of its flagship GMA Pinoy (GPTV) and lifestyle channel GMA Life TV (GLTV) that grew 13 percent to 329,108 and 9 percent to 124,884, respectively. Subscription and advertising revenues from GMA International dipped by 0.9 percent due to the peso's appreciation. But discounting the impact of the forex fluctuations, international sales actually grew by 2 percent.   Meanwhile, earnings from subsidiaries went up by 14 percent coming from external sources, mainly from Digify Inc.—GMA New Media’s new techno-creative lab that provides technology-based solutions to other companies. The company's content acquisition and distribution arm, GMA Worldwide Inc. sold over 60 program and movie titles to Brunei, Cambodia, Hong Kong, Indonesia, Korea, Macau, Malaysia, Myanmar, Singapore, Thailand, Vietnam, Italy, Kenya, Tanzania and USA. GMA's total operating expenses (OPEX) in 2012 rose 7 percent to P9.593 billion on higher amortization of program rights in order to further diversify and strengthen its programming. Higher operating expenses Higher OPEX also stemmed from an increase in depreciation charges from the commissioning of the state-of-the-art Media Asset Management System (MAMS), which allowed the Network to migrate to a tapeless, file-based workflow; along with massive investments for the launch of multimillion-peso originating stations in Ilocos Norte (GMA Ilocos) and Naga City (GMA Bicol) in 2012.   General and administrative expenses (GAEX) rose by 12 percent due to the disbursement of several employee bonuses compounded by the growth in the Network’s manpower headcount.   GMA thus ended 2012 with earnings before interest, taxes, depreciation and amortization (EBITDA) of P3.397 billion to reach a double-digit gain of 10 percent year-on-year. But due to OPEX, net income after tax settled at P1.617 billion, a decline of 5 percent against a year-earlier.   GMA continues to widen its reach and bring quality programs to viewers around the country this year and allot multimillion-peso investments for expansion. In January, the Network opened its Cagayan de Oro-based originating station—GMA Northern Mindanao—which covers 1.4 million TV households or the second widest coverage by a GMA station next to Mega Manila. This is in line with GMA’s intensive preparations for Eleksyon 2013—the Network’s special coverage of the forthcoming mid-term elections, which is touted to be the biggest and widest undertaken by GMA.   GMA International is also set to deepen channel penetrations this year, with the launch of GMA Pinoy TV, GMA Life TV and GMA News TV-International through more affiliates in Canada, US, the Middle East, Europe, and the Asia Pacific regions. Nationwide ratings leader   For 2012, GMA led rival networks in nationwide ratings for the second year in a row based on data from the industry’s widely recognized ratings service provider Nielsen TV Audience Measurement.   For the period, GMA scored an average total day household audience share of 34.4 percent, leading ABS-CBN’s 31.5 percent by 2.9 points, and TV5’s 15.1 percent by 19.3 points.   GMA also ruled across all dayparts in the important areas of Urban Luzon and Mega Manila, which make up 77 and 59.5 percent, respectively, of the total urban television population in the country.   In Urban Luzon, GMA scored a 38.2 percent average total day household audience share, ahead by 10.8 points over ABS-CBN’s 27.4 percent and by 23.6 points over TV5’s 14.6 percent average. GMA also ended 2012 strongly in bailiwick Mega Manila, with an average total day household audience share of 39.2 percent or 13.4 points ahead of ABS-CBN’s 25.8 percent and 24 points over TV5’s 15.2 percent.   GMA subscribes to Nielsen TV Audience Measurement along with 22 other paying subscribers including another local major television network (TV5), Faulkner Media, CBN Asia, 15 advertising agencies, and 4 regional clients. GMA News Online is a wholly-owned subsidiary of GMA New Media Inc., the new media arm of GMA Network Inc. — With Sieg Alegado/VS, GMA News