In a press briefing, ABS-CBN chief finance officer Rolando Valdueza said the firm delivered consolidated revenues of P32.2 billion from advertising and consumer sales, posting an increase of 30 percent year-on-year.
ABS-CBN’s advertising revenues rose 50 percent to P21.7 billion due to the surge in total advertising minutes sold, programmed rate increase that took effect in February 2010 and political advertisement.
Consumer sales in 2010 amounted to P10.4 billion, posting a slight 1 percent increase from a year ago, mainly from Sky Cable which increased its share to total consumer sales to 49 percent with it its subscription and service revenue contributing P3.9 billion, or P348 million more than 2009.
ABS-CBN’s Global contribution share amounted to 38 percent, while ABS- CBN Film Production, Inc., better known as Star Cinema, contribution share amounted to 13 percent.
Valdueza said there was a 5 to 7 percent growth in ad minutes in the first quarter this year and ABS-CBN this to continue for the rest of the year. The firm thus expects earnings growth to be driven by advertising given the improvement in the economy.
He noted that ad revenues will also be boosted by the 15 percent hike in rates implemented last February, explaining that the firm usually raises rates by 15 percent every year.
While there will be no political ads this year’ which reached added P3 billion to revenues in 2010 ‘ABS-CBN expects this to be compensated by revenue growth from consumer sales.
Consumer sales growth will come from Sky Cable’s broadband business which is aiming to double its current 31,000 subscribers and grow its profits to P250 million from P190 million.
“There is also a direction for us to produce more movies in star cinema, plus the fact that despite the competition, we were still able to manage our costs,” Valdueza said.
He added that growth will be supported by a higher capital expenditure program of over P5 billion of which P1.4 billion will be used to expand the reach of Sky Cable’s broadband service, P600 million for the launch of digital TV and P200 million for acquisition of film rights.
About P3 billion is allotted for transmission, production of local programs, augmenting technical equipment and improve studio facilities.
Capital expenditure and film and program rights acquisition in 2010 amounted to P3.7 billion, 25 percent higher than the level of spending from previous year.
