Quezon City, Philippines (August 10, 2010) - For the first six months of 2010, ABS-CBN generated profits of P2.27 billion because of "strong growth in regular advertising revenues complemented by political ad spending."

According to a report furnished by ABS-CBN, this figure is 179% more than net income of P813 million in the first half of 2009.

In the same report prepared by Head of Investor Relations, Charles Gamo, ABS-CBN brought in consolidated revenues of P16.84 billion from advertising and consumer sales from January 1 to June 30, 2010. This figure is reportedly P5.16 billion or 44% higher than the P11.69 billion in the first half of 2009. 

Consolidated advertising revenues across all platforms and subsidiaries reached P11.5 billion in the first six months of the year, P4.78 billion or 71% higher than the P6.72 billion in the same period in 2009. This total includes non-recurring advertising revenues amounting to P2.33 billion, which are advertising revenues from political advocacies and political ads that cannot be replaced by revenues from regular advertisers during non-election periods.

Recurring advertising revenues, mostly from regular advertisers, grew by P2.45 billion or 36% to P9.17 billion. The report attributes this increase to a strong increase in total advertising minutes sold as well as the rate adjustments that took effect in August 2009 and in February this year.

Total advertising minutes sold by ABS-CBN in the first six months of the year jumped 42%, boosted by strong regular advertising minutes growth, complemented by election-related advertising that contributed 11% of total minutes sold. Advertising minutes sold to regular advertisers in the first semester rose 26%. Mr. Gamo's report indicates that this increase can be attributed to "strong national ratings and high audience shares."

In a reversal of relative share in total minutes sold, ABS-CBN enjoyed a 60% share versus GMA-7's 40% share of the combined total minutes sold by the two channels beginning in May.


According to the Investor Relations report of ABS-CBN, the Kapamilya network has "overtaken" GMA-7's advertising minutes load since March. They based this on figures from Nielsen Media Research.

RATINGS GAME. When it comes to the rating game, data from Kantar Media-TNS National Philippines Television Audience Measurement service shows that ABS-CBN maintained its national audience share and ratings leadership with total-day audience share averaging 44% in the second quarter. This figure represents a lead of 12 to 13 percentage points over rival network GMA-7.

ABS-CBN has also taken the lead in Metro Manila with a 38% audience share in June, and in Mega Manila with a 36% audience share. In South Luzon and in the Visayas and Mindanao regions, ABS-CBN dominated the airwaves in June with audience shares hovering at around 60% or higher, and maintaining 35 to 50 percentage point-wide margins over GMA-7. 

In June 2010, ABS-CBN swept the top 11 slots in the Top 20 programs list, with the top 10 programs enjoying ratings of at least 25% and audience shares ranging from 43% to as high as 61%. Primetime programs launched in the first half of 2010--Agua Bendita, Kung Tayo'y Magkakalayo, and Pilipinas Got Talent--enjoyed national program ratings in the mid- to high 30s.  Habang May Buhay, Momay, Tanging Yaman, Rubi and PBB Teen Clash registered ratings in the mid-20s and held their own against competing programs in the same time slots.

REVENUES. Consumer sales for the first semester of 2010 amounted to P5.34 billion, registering an increase of P376 million or 8% over the first half of 2009 growth, mainly from ABS-CBN Global and Skycable.

ABS-CBN Global's revenues rose by 14% in U.S. dollar terms but this was slowed down to a 9% year-on-year growth in peso terms by the appreciation of the Philippine peso exchange rate. ABS-CBN Global's overall viewer count increased by 10% year-on-year, driven by continuing strong double-digit subscriber growth in cable TV and IPTV subscriptions. Double-digit subscriber growth in Canada was driven by new cable distribution partnerships, while in Australia, more affordable and flexible plans attracted new direct-to-home subscribers.

Skycable's revenues from cable TV and broadband services grew 13% year-on-year in the first semester, driven by a 92% increase in broadband service revenues as its broadband subscriber count rose 61% versus a year ago.  Skycable's low-priced postpaid cable TV offering Sky280 and higher-ARPU SkyBroadband services have been gaining traction among their target markets.

Three of the six films produced by ABS-CBN Film Productions, Inc. in the first helf of this year—I  Love You, Goodbye; Miss You Like Crazy and Here Comes the Bride—topped the  P100 million mark in box office receipts.


EXPENSES. Total expenses in the first six months of 2010 grew by P2.12 billion or 23% year-on-year to P11.32 billion, driven mostly by higher production costs and general and administrative expenses (GAEX).

Total programming hours of in-house produced primetime dramas, afternoon programs, and variety shows increased by 22% in the first six months of the year, as ABS-CBN introduced more local programs in response to viewer needs as well as advertiser demand. Correspondingly, total production costs in the first semester of 2010 rose by P896 million or 30% to P3.84 billion.

Cost of sales and services grew by only 5% or P166 million to P3.49 billion, in line with the increase in consumer sales. ABS-CBN Global's cost of sales grew 11% in peso terms from higher variable costs associated with the growth in IPTV subscriptions, even as its sale of services and goods rose by 9% year-on-year. Skycable's cost of sales rose by only 5% year-on-year even as its subscription sales went up by 12%.

Total General and Administrative Expenses (GAEX) posted a 42% or P1.14 billion year-on-year increase to P3.82 billion, which includes P591 million for non-recurring employee costs including performance pay and pay adjustments to keep compensation packages competitive. Netting out the non-recurring employee costs of P591 million, recurring total GAEX growth is only 20%.

NET INCOME and EBITDA. As a result of continuing efforts to manage and control the Network's expenses even with strong revenue growth, recurring net income reached P1.26 billion in the first half of 2010, 55% or P445 million more than the P813 million net income generated in the first half of 2009.