GMA-7 to miss P2.3-B profit target for 2012
MANILA, Philippines - The country's second largest media group, GMA Network, would not meet its P2.3 billion target net income for 2013 amid sluggish sales in the last months of the year and higher expenses.
“We will not meet our target this year. Our net income will be a little over P2 billion,” Felipe Gozon, chairman of GMA Network, which operates GMA-7, told reporters last week.
However, GMA-7’s expected 2012 profit will be higher than previous year’s P1.715 billion, and revenues will reach P13 billion for 2012.
Gozon also mentioned that the Philippines' positive economic growth rate of 7.1% in the 3rd quarter did not translate to higher advertising revenues.
"Revenues in December was slow compared to the previous months as advertisers followed an industry wide reduction in adspend," GMA-7 said in a disclosure to the stock exchange.
This trend was partly due to the financial crises in the United States and Europe, Gozon explained.
Ballooning expenses include payout of several employee bonuses, construction of the originating stations in Ilocos and Bicol, among others, the media firm added.
Better during election year
Gozon is bullish that 2013 will be a better year for the media firm.
“Our profit for next year will definitely be higher than this year because it is election next year,” he said.
GMA-7 has so far booked 60% of its sales target for next year, he stressed. This excludes political advertisements, which boost revenues during an election year.
“We increase our ad rates every year but the effective rate, which is the discount an advertiser gets from the negotiated rate, varies per client.”
The network reported at the end of September a net income of P1.58 billion. - Rappler.com