ABS-CBN hits 2016 target income, fueled by election spending
MANILA, Philippines – ABS-CBN Corporation hit its target for 2016, with its net income jumping by 39% to P3.52 billion on the back of higher advertising revenues due to election-related spending.
This is the Lopez-led media and entertainment company's fastest growth in the past 3 years. ABS-CBN earlier set a net income target of between P3.2 billion and P3.5 billion for 2016. (READ: More political ads in 3rd presidential debate of ABS-CBN)
ABS-CBN Chief Financial Officer Aldrin Cerrado said in a briefing in Makati City on Monday, March 20 that the company saw a 9% growth in revenue, which closed at P41.6 billion in 2016. Its cost and expenses were up only 6% last year.
Cerrado said ABS-CBN was successful in its continuing efforts to control production costs and reduce expenses by about 4% on a per hour basis compared to 2015.
"We are very pleased to have exceeded our earnings guidance for 2016," Cerrado said. "Full-year growth in advertising revenues, boosted by election-related spending, was about 11%."
Cerrado said ABS-CBN's election-related spending for 2016 amounted to P2.8 billion, versus P2.4 billion in 2010.
"We noticed that in the number of minutes, only a third of the minutes compared to that of 2010. Election-related advertising did not eat up all ofour minutes," he added.
It was in 2015 when ABS-CBN adopted the cost per individual rating point pricing (CPIRP) scheme, which rewards the company for an increase in ratings. 2016 was its first full-year of implementation.
Ratings to revenues
"Our continued strong leadership in national audience share was also a key contributor to our record performance because improved ratings now translate to increased revenues," said Cerrado. "We have also been able to manage our costs and expenses efficiently."
ABS-CBN said its rollout of its digital terrestrial television (DTT) helped boost its audience share with over 2.3 million boxes sold as of the end of December 2016.
The Lopez-led firm said total assets rose to P72.7 billion as of the end December 2016, compared to P69.9 billion in 2015. The company's equity base went up to P31.7 billion as of end of December 2016. (READ: #PHVote: Businesses winning, losing in 2016 elections)
"We are also extremely happy with the performance of our subsidiaries last year. The healthy growth in our advertising revenues coupled with the accomplishments of our different business units enabled us to deliver record earnings performance for ABS-CBN," the company's group chief finance officer Ron Valdueza said.
Meanwhile, SkyCable saw an 8% growth in revenues, driven by the introduction of SkyDirect, its newly launched Direct-to-Home Pay TV offering, and the continued sharp increase in its broadband subscriber base.
By year-end, the company had over 112,000 SkyDirect subscribers and more than 200,000 broadband subscribers, bringing Sky’s total subscriber base to over one million.
Kidzania, the company's educational theme park, has attracted over 360,000 visitors for 2016, while its TV shopping channel O Shopping generated over P820 million in sales.
Shares in ABS-CBN inched down by 0.97% to P46 each on Monday, March 20 from that of Friday. – Rappler.com