GMA posts 17% hike in 9-month net profit

REPORT FROM BUSINESSWORLD PUBLICLY LISTED GMA Network, Inc. on Wednesday said it had posted a 17% increase in consolidated net income for the nine months ending in September. The closest competitor of the Lopez-led ABS-CBN Broadcasting Corp. said its net income had gone up to P1.788 billion for the January to September period from P1.532 billion in 2006. Revenues for the period were up by 7% to P8.8 billion, boosted by higher airtime revenues and subscription income, while operation expense increased by 5% to P4.8 billion due to higher talent fees. GMA Executive Vice-President and Chief Operating Officer Jimmy Duavit told BusinessWorld on the sidelines of a company briefing that contained cost and high-value programming had driven the improved bottom line. "We offer high value programs that result [in] better ratings, which in turn contribute to the behavior of the advertisers," he said. Officials of GMA, however, admitted that the company has been lagging behind its major rival because of weak regional signal. Mr. Duavit said GMA "can comfortably and logically" claim leadership in Mega Manila. The firm is working on closing the gap on a nationwide basis. He explained that the nationwide lead could be snatched from ABS-CBN through expansion efforts in other parts of the country, with transmitter sites in Cagayan de Oro and Legaspi already finished. Studio facilities in Davao and Dagupan are also in the works as these are expected to help GMA mount locally produced shows that will directly compete with markets dominated by ABS-CBN in Mindanao and Northern Luzon. GMA is also upgrading its regional signals in Batangas, Legaspi, Naga and Mt. Kitanglad in Bukidnon, with target completion in January 2008 at the latest. GMA President and Chief Executive Officer Felipe L. Gozon said GMA was looking to "at least equalize the nationwide ratings by the end of 2008." Manuel P. Quiogue, president of GMA Marketing and Productions, Inc., said it was not impossible to catch up with ABS-CBN. "It takes very little increases in each area to at least achieve parity, one or two points per area, if put together can do that." Earlier, Felipe S. Yalong, senior vice-president for finance and group head for corporate services said GMA has been able to control costs by treating each program as business unit saying, "Each program goes with a business plan." Mr. Gozon added that the company was optimistic that the network would be able to continue its growth. "I think we’re on track. We have the momentum now, and we can sustain our growth." Analysts are bullish about GMA’s prospects for the rest of the year. "I think GMA can surpass its earnings guidance given the strong performance it has shown for the nine months," Jan Michael Acedo, analyst of First Metro Securities, said. — MGSR/BusinessWorld