Televisa Q4 profit down 11%

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Mexico City -- Mexican media giant Televisa on Wednesday posted an 11% drop in fourth-quarter profit despite solid revenue growth from its pay TV divisions.

The nation's leading network said quarterly net income fell to 2.34 billion pesos ($217 million), compared with 2.61 billion pesos a year earlier. The lost was attributable to the absence of a 2005 fourth-quarter tax benefit when Televisa brought satcaster Sky Mexico onto its books.

Televisa saw quarterly net sales grow nearly 7% to 10.7 billion pesos. As usual, the network's broadcast TV unit and Sky Mexico were the top two revenue generators.

Sky Mexico's subscriber base climbed from 1.2 million to more than 1.4 million clients. Cablevision, Televisa's cable operator, saw a 17% spike in its subscriber base, finishing the quarter with nearly 500,000 clients.

After losing a bid last year to acquire U.S. Spanish-language broadcaster Univision, Televisa continues to explore ways to boost its presence in the lucrative Hispanic market. Programming exports this quarter climbed 8.7%, a large chunk of which came from content sold to Univision, Televisa's stateside partner. Here in Mexico, where Televisa controls about 70% of the broadcast TV market, growth opportunities are significantly more limited. However, Televisa's recent launch of a gaming business will contribute to about 5% of the media firm's total revenues, according to analysts' estimates.

Another new line of business likely to boost revenues is triple play service. Currently, Cablevision offers only pay TV and Internet, but last year the government approved a convergence agreement, allowing cable companies to provide bundled voice, data and video services.

Looking ahead for Televisa's broadcast television unit, the company expects ad sales to decrease by 5% in real terms for the first half of the year due to the absence of revenue earned from World Cup and political advertising in 2006.

"In 2007 our television broadcasting business will face a difficult comparison, particularly in the first half of the year, due to last yea's nonrecurring political and World Cup advertising," Televisa said.

Televisa added that full-year net income grew nearly 35%, while net sales jumped 12%.
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