ABS-CBN says 9-month net income up 70%

By Honey Madrilejos-Reyes And Bloomberg
Reporter

THE LOPEZ-controlled ABS-CBN Broadcasting Corp. (ABS-CBN) reported a 70-percent increase in net income for the first nine months of the year to P694 million, compared to the P409 million it posted in the same period last year.
           
Gross revenues, meanwhile, rose by a minimal 2 percent to P12.95 billion driven by stable airtime revenues and license fees from Direct TV.
           
In a briefing Tuesday, ABS-CBN vice president for finance Miguel Jose T. Navarrete said despite a general slowdown in industry advertising spend, parent airtime revenues remained stable at P7.26 billion due to revenue contribution from non-traditional advertising or creative buys such as product intrusions and product placements.
           
“In addition, revenues were boosted by license fees from the migration of direct to home (DTH) subscribers in North America to Direct TV’s platform, which amounted to P825 million, up 34 percent year on year,” he explained.
           
For the third quarter of the year alone, ABS-CBN’s net profit fell P178.6 million versus P197.9 million in the same period last year, as revenues also went down to P4.6 billion from P4.9 billion.
           
Total expenses for the nine-month period, meanwhile, went down by 2 percent to P11.75 billion. However, excluding nonrecurring charges of P419 million in nine months related to DirectTV marketing expenses as well as P453 million Direct TV marketing expenses and Special Separation Program expenses booked in January to September 2005, total recurring expenses declined by 2 percent to P11.33 billion on the back of lower employee cost.

Benpres

MEANWHILE, Benpres Holdings Corp., which owns among others ABS-CBN and the country’s largest power distributor Manila Electric Co. (Meralco), said its nine-month profit more than tripled, boosted by a one-time gain in one of its units.
           
Benpres profit rose to P2.98 billion from P899 million a year earlier, the company said in a statement Tuesday, without providing third-quarter figures. It reported a P154-million loss in the second quarter and a P2.08-million profit in the first quarter.
           
Also on Tuesday, Meralco said it will sell P12 billion ($241 million) of notes to refinance debt and fund working capital.
           
The company, which swung to a profit in the third quarter on higher sales, signed an agreement with underwriters Monday for the seven-year notes, Meralco said in a statement to the Philippine Stock Exchange Tuesday. Six banks will help arrange the sale on December 14.
           
Meralco joins other Philippine companies like Petron Corp., Manila Water Co. and Smart Communications Inc. that took advantage of low yields on domestic debt to replace obligations obtained when interest rates were higher. Seven-year peso bond had a yield of 6.271 percent as of 11:30 a.m. Tuesday, according to the Money Market Association, the lowest since Bloomberg started tracking the securities in October 2001.
           
BDO Capital & Investment Corp., BPI Capital Corp., China Banking Corp., Development Bank of the Philippines, PCI Capital Corp. and PNB Capital and Investment Corp. are helping arrange the sale.
           
Meralco made a profit of P229 million in the three months to September 30 from a loss a year earlier.
           
Meralco A shares on Tuesday rose 5.26 percent to close at P30, while its B shares rose 7.69 percent to close at P35.
           
ABS-CBN shares fell 5.49 percent to P21.50 at the noon close of trading in Manila, before its earnings announcement. Benpres shares, meanwhile, rose 6.41 percent to P1.66.