Improved ratings seen to spur
ABS-CBN’s earnings

THE Philippines’ oldest media empire ABS-CBN Broadcasting Corp. (ABS-CBN) said its net profit starting the second quarter would be driven by its domestic operations as ratings for its primetime programming have been steadily increasing.
       “This time it will be our domestic operations which will take the lead. We are expecting higher profit in the second quarter versus what we made in the previous quarter. Likewise, we are also seeing lower operating expenses,” said ABS-CBN chairman and president Eugenio M. Lopez III in an interview Thursday.
       ABS-CBN managed to post a turnaround in net profit for the first quarter with P121 million from a loss of P114 million in the same period last year. Revenues were also higher by 14 percent to P3.95 billion.
       For some time, the company’s global operations have been offsetting weak airtime revenues due to lower ratings. However, the scenario started to change early this year.
       “Revenues were also stable as the introduction of new shows from a revitalized programming group was slowly but surely rebuilding its strength in primetime,” Lopez said.
       The company’s sound financial position was also spurred by the growing number of The Filipino Channel (TFC) and Direct TV subscribers, which to date is pegged at 2 million. TFC and Direct TV are under the company’s wholly owned unit ABS-CBN Global.
       “While we are not yet completely out of the woods, 2006 promises to be a turnaround year. Indeed the seeds of recovery are in place, and we intend to nurture these seeds to reach full blossom and bear fruit,” Lopez said.
       Last year, the company’s net income fell 62 percent to P288 million versus P750.75 million in 2004 due to weak airtime revenues and lower ratings.
       In particular, parent airtime revenues composed of advertising revenues from TV-VHF (Channel 2), AM and FM radio, and the regional network declined by 8 percent to P9.36 billion as Channel 2 ratings in Mega Manila averaged a lower 14 percent in 2005 compared to 16 percent in 2004.
       The company’s revenues, however, went up 8 percent to P17.05 billion in 2005 driven by license fees from Direct TV and continued growth of ABS-CBN Global revenues. Honey Madrilejos-Reyes