The net earnings of the country’s two top broadcasting networks are always an interesting barometer.
Fact is, both ABS-CBN and GMA-7 registered declining earnings in the first six months of 2017.
GMA Network’s net income plunged by P826 million in the first half of 2017, or 35 percent lower than in the same period last year.
In 2016, GMA reported a net income of P2.378 billion from January to June.
ABS-CBN's net earnings also dipped in the first half of this year to P858 million, or 41 percent lower than in the same period last year.
In 2016, ABS-CBN reported a net income of P2.1 billion from January to June.
Noteworthy is the 2016 advertising climate. That year, both networks were buoyed by political advertisements, which explains the comparative decline in their financial performance this year.
In absolute figures, for the first half of 2017, GMA’s earnings, after taxes, were at P1.552 billion, while ABS-CBN’s, after taxes, were at P1.256 billion.
GMA finished ahead by P296 million, although ABS-CBN generated higher gross revenues.
Table 1. GMA versus ABS-CBN net income in 2016 and 2017 (amounts in million pesos).
Exclusive of the income generated from political ads in 2016, the two networks performed differently.
ABS-CBN’s recurring airtime sales went down by P147 million or 1.5 percent less than in the first half of 2016.
In contrast, GMA’s sales from recurring placements jumped 4.2 percent at P276 million.
Inclusive of the windfall from last year’s political advocacies and advertisements, GMA’s advertising revenues in the first half of 2017 settled at P1.212 billion, 15 percent lower than last year.
Meanwhile, ABS-CBN's equivalent advertising revenues reached P2.638 billion, or 21.1 percent lower than last year.
GMA had a smaller drop in advertising revenues compared to ABS-CBN.
Table 2. GMA versus ABS-CBN recurring sales in 2017 and 2016 (amounts in million pesos)
In terms of financial metrics, including Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), Return on Assets (ROA), Net Income Margin, and Return on Equity (ROE), GMA yielded higher results than ABS-CBN.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reports a company's profits before interest on debt and taxes owed or paid to the government are subtracted.
Based on the Farlex Financial Dictionary, EBITDA is a measure of a company's ability to produce income on its operations in a given year.
GMA’s EBITDA reached 38 percent; ABS-CBN reached 9 percent.
ROA (Return on Assets) is an indicator of how profitable a company is relative to its total assets, based on a definition provided by www.investopedia.com.
ROA gives an idea of how efficient management is at using its assets to generate earnings.
The higher the ROA, the better the management, explains the website www.inc.com.
GMA’s ROA reached 20 percent; ABS-CBN reached 3 percent.
The Net Income Margin of a company is a percentage representing the ratio of net income to total revenue.
According to www.smallbusiness.chron.com, this figure is a measure of profitability that indicates how much of every dollar of the business sales is already profit.
GMA’s Net Income Margin reached 20 percent; ABS-CBN reached 6 percent.
Return on Equity (ROE) is a profitability ratio that measures the ability of a firm to generate profits from its shareholders investments in the company.
This figure signifies how good the company is in generating returns on investment received from its shareholders, based on an explanation given by www.economictimes.com
GMA’s Return on Equity reached 20 percent; ABS-CBN reached 8 percent.
GMA outperformed its rival station ABS-CBN based on these indicators and financial ratios.
Note: All figures are based on financial reports submitted by GMA-7 and ABS-CBN to the Philippine Stock Exchange, as uploaded in the PSE EDGE website.