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Spanish-language media giant Univision Communications, which late last year sold a majority stake to an investor group led by former Viacom CFO Wade Davis and recently agreed to a merger with Mexican TV giant Televisa, reported a big second-quarter advertising revenue improvement.
The company said Thursday that its quarterly profit amounted to $36.6 million, compared with a year-ago loss of $27.3 million. Adjusted operating income before depreciation and amortization (OIBDA), another profitability metric, in the second quarter rose from $242.8 million to $268.8 million. Revenue rose 32 percent to $700.2 million.
“The company has completely turned round,” Davis told analysts during an afternoon call, which includes launching a streaming service and Spanish-language content primetime ratings growth. Univision also posted advertising sales growth during its latest financial quarter.
“As we build for the future, we are relentlessly focused on optimizing the fundamentals of our existing ad sales,” Davis added. He added Univision had not seen a softening of the domestic ad market due to headlines and concerns around the Delta variant spike.
“We will have to wait and see… If the Delta variant continues in the wrong direction, for sure that could have a negative impact,” Davis told analysts.
Quarterly ad revenue jumped 72 percent from the coronavirus pandemic-hit year-ago period to $407.2 million and “surpassed the second quarter of 2019,” when it had recorded $405.1 million, the company said.
Core ad revenue, which is adjusted for political and advocacy ads, rose 70 percent. Media networks unit ad revenue increased 66 percent, or 63 percent when looking at core results. “The increase in media networks core advertising revenue was due to higher ad revenue driven by new brand activations, strong scatter volume and pricing, growth in previously low volume accounts, two major soccer tournaments, and improvements in the auto, retail and beverage sectors, which are recovering from the negative impacts of COVID-19,” the company said.
Said Davis in an earlier statement that accompanied the financial results: “This quarter marks another period of strong performance and progress as Univision steadily executes on our transformation strategy. We delivered above-market topline growth with total ad sales surpassing 2019 results for the second quarter in a row.”
He added: “We continued to expand and invest in our streaming capabilities and offerings with the introduction of new leadership and planned launch of our two-tiered service offering. We further strengthened our content engine with original programming and established important partnerships that will allow us to bring more leading content to more households, across more platforms. Importantly, as we near the closing of the Televisa-Univision transaction in the fourth quarter, we have taken steps to position the combined company for continued success, including the addition of new world-class leaders combined with the best talent across Televisa and Univision. Our transformation is well underway, and we believe we are on the fast track to becoming the preeminent global Spanish-language multiplatform media company.”
Televisa and Univision are set to combine into a new company to be called Televisa-Univision, the two announced in mid-April, with Univision set to pay about $4.8 billion for Televisa’s content assets. Davis will hold the same title at the combined company, with Televisa co-CEO Alfonso de Angoitia serving as executive chairman of the board. Televisa will be the largest minority shareholder with a 45 percent stake.
The deal would create the largest Spanish-language media company in the world with bases in the two biggest Spanish-speaking markets: Mexico and the United States. Televisa is a production powerhouse, making some 86,000 hours of content in 2020. Both companies also hold big sports rights packages.
The deal is expected to close later this year, pending regulatory approval in both the U.S. and Mexico and Televisa shareholder approval. The boards of the two companies have already signed off on the transaction.
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