Lack of election pesos hurts Televisa Q2

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MEXICO CITY -- Mexican media powerhouse Grupo Televisa on Monday said its second-quarter net profit fell 15% because of the absence of extraordinary ad revenue earned during the year-earlier period.

Televisa, the world's top producer of Spanish-language content and Mexico's leading network, posted a majority interest net income of 2.03 billion pesos ($188 million), down from 2.39 billion pesos a year ago. The broadcaster raked in an ad revenue windfall last year from political spots placed ahead of the presidential election. Transmissions of World Cup soccer matches also drew strong advertising revenue in 2006.

Total net sales for the second quarter came in at 9.8 billion pesos, representing a 3.7% decrease.

"This decrease reflected lower sales in our television broadcasting segment that were partially offset by higher sales in our other businesses," a Televisa company statement said.

As usual, Televisa got solid performance from its pay TV divisions. Satcaster Sky Mexico, the company's second-most-profitable division, reported a 7.5% jump in quarterly net sales. Its subscriber base climbed to nearly 1.5 million.

Cablevision, one of the nation's largest cable operators, posted a 17% spike in sales and a 15% increase in its subscriber base as the company branches out into the realm of triple-play service.

Televisa recently received conditional approval from antitrust regulators to purchase a 49% stake in Cablemas, Mexico's second-largest cabler, and a 50% share in TVI, a leading cabler in northern Mexico. Combined, the two acquisitions will give Televisa an additional 1 million television and broadband Internet clients.

Televisa has made no secret about its plans to seek consolidation opportunities in the cable TV market as it looks to expand triple-play service nationwide.

Looking ahead, the broadcaster said it expects television broadcasting to decrease by about 2% during the year.
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