April 21, 2014

GMA Network posts 3% hike in 2013 net income

In its filing to the Exchange, GMA Network Inc (GMA7, GMAP – Not rated) reported a net income of P1.67b in 2013, up by just 3% YoY on higher costs amid slowing revenues. Revenues grew by 7% YoY to P12.95b but partly buoyed by revenues from political advocacies and advertisements. Without the latter, revenues would have been relatively flat (+1% YoY). Operating costs grew by 8% YoY to P10.b while EBITDA inched up 9% YoY to P3.72b. This yielded an EBITDA margin of 28.7% in 2013 or relatively steady from 28.3% in 2012.

Our take: Management has earlier guided for a 10% earnings growth but cut this to a flat growth target towards the latter part of the year on rising expenses related to its bid for program diversification amid stiff competition. Production costs which accounted for more than half of total expenses indeed grew 13% YoY. In terms overall results, ABS-CBN (ABS, ABSP – Not rated) showed a better performance and outpaced GMA in terms of growth.

ABS earlier reported that its revenues grew 15% while net income was up 25%. EBITDA also grew 13% YoY. However, ABS-CBN’s EBITDA margin was lower at 21.6% (slightly down from 22.1% in 2012) partly due to negative EBITDA of new businesses. – WealthSec