Lopez Holdings


ABS-CBN piles up the cash EBITDA up 18%, profits soar 500%ABS-CBN Broadcasting Corp. showed indomitable resilience in 2003, with EBITDA (earnings before interest, taxes, depreciation and amortization) surging 18% to P4.295 billion from P3.642 billion in 2002. EBITDA reflects the company's ability to generate cash from operating its business units, cash which can be used for paying off debt and for investing in promising new projects.

Randy Estrellado, ABS-CBN chief financial officer, attributed the company's strong EBITDA performance to management's determined efforts to "drive revenues, optimize operating efficiencies and closely manage capital spending." The cash pile improves ABS-CBN's financial position and ensures it can settle all obligations due in the next 12 months. Net interest bearing debt in 2003 was down to P4.21 billion and net debt-to-equity stood at 32% versus 46% the previous year.

Reaping the benefits of focusing on its core business after closing down unprofitable units in 2002, ABS-CBN's 2003 net income soared 500% to P1.009 billion from P166 million the previous year. Excluding the impact of losses from discontinued operations, net income would have amounted to P1.011 billion, 131% higher than P438 million in 2002.

In 2003, consolidated gross airtime and other broadcasting related revenues increased by 12% to P11.064 billion from P9.914 billion in 2002, as airtime revenues from flagship VHF Channel 2 grew 15% with better commercial loading at 50% versus 42% the year before. Airtime revenues from Channel 2 alone accounted for 93% of 2003 parent airtime revenues of P10.021 billion.

"The recovery in advertising spending in the second half of 2002 was sustained in 2003 amidst an improved economic outlook and stable consumer spending," Estrellado said.

Airtime revenues from subsidiaries increased by 17% to P898 million with all platforms posting growth. Studio 23, in particular, improved commercial loading to 9% from 6% and increased airtime revenues to P588 million. Studio 23 accounts for 5% of consolidated revenues.

Other key subsidiaries further strengthened ABS-CBN's operating and financial position with solid performance by ABS-CBN Global and ABS-CBN Film Productions (Star Cinema). ABS-CBN Global's net sales and revenues increased 24% to P2.371 billion from P1.918 billion, with an estimated viewership base of 1.3 million. ABS-CBN Film Productions last year released several blockbuster films including Tanging Ina, which achieved an unprecedented first in Philippine box office history with gross ticket sales of over P178 million.

Estrellado expects stiffer competition in the broadcasting industry in 2004. However, he believes ABS-CBN will be up to task and retain its leading position as a total content provider, reaching its chosen audiences through multiple platforms. "We're also keeping a tight watch on expenses to ensure the gains from operations will be sustainable in the long term," he said.

Compared to net revenues, consolidated cost and operating expenses increased by a lower rate of 12% to P10.401 billion from P9.276 billion.

ABS-CBN spent P1.558 billion for its capital expenditure (capex) and program acquisition last year. 2004 capex spending is estimated to remain at the same level.

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Lopez Holdings Corporation 
16/F North Tower, Rockwell Business Center Sheridan, Sheridan St. corner United St., 1550 Bgy. Highway Hills, Mandaluyong City, Philippines

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