Ad losses bring Telecinco revenue down

Broadcaster cuts operating costs to post a profit

MADRID -- A 40% drop in advertising revenue during the first nine months of 2009 at Spanish broadcaster Telecinco pushed revenue down, but aggressive cost-cutting measures helped the company post €62.2 million ($92.28 million) profit, still a 72.8% nose-dive from the same period last year.

The broadcaster in a statement said a 14.8% cut in operative costs allowed it to post a profit.

Net revenue dropped 41.2% to €432.2 million ($641 million) from 734.9% from the same period last year. Advertising, the main source of revenue, plummeted from €703.6 million last year for the same period to €414.5 million ($614 million).

But insiders expect the advertising market to improve in January when pubcaster Television Espanola is due to stop showing advertising.

Telecinco, which has struggled to maintain its corner of the audience, was Spain's most-watched channel in September for the first time this year, with a 15.6% share.

Also Thursday, rival private broadcaster Antena 3 posted €18.9 million ($28 million) net profit, 73.6% drop from the same period last year. The company stemmed the fall of advertising revenue, which had been down 26.6% in the second quarter, to an 11.6% fall in the third quarter.

Shares for both broadcasters rose after results were posted as the market deemed them better than expected. Telecinco rose more than 9% Thursday to close at €7.76 ($11.5) and Antena 3 shot up 14.8% to close at €6.21 ($11.3).