MEXICO CITY, July 18, 2013 (GLOBE NEWSWIRE) -- TV Azteca, S.A.B. de C.V. (BMV:AZTECA) (Latibex:XTZA), one of the two largest producers of Spanish-language television programming in the world, announced today financial results for the second quarter and first half of 2013.
Second quarter results
Net sales for the quarter were Ps.2,820 million, from Ps. 2,994 million for the same quarter of 2012. The decrease in sales continues to be caused largely by the change in government that redefines communication projects; the company expects such projects to recover during the second half of 2013.
Total costs and expenses were Ps.1,973 million, 3% below Ps.2,028 million the same period of the previous year. As a result, Azteca reported EBITDA of Ps.847 million, compared to Ps.966 million from last year; EBITDA margin for the quarter was 30%.
The company registered a net loss of Ps.85 million, compared to net income of Ps.40 million for the same quarter of 2012.
| 2Q 2012 | 2Q 2013 | Change | ||
| Ps. | % | |||
| Net sales | $ 2,994 | $ 2,820 | $ (174) | -6% |
| EBITDA | $ 966 | $ 847 | $ (119) | -12% |
| Net result | $ 40 | $ (85) | $ (125) | --- |
| Net result per CPO | $ 0.01 | $ (0.03) | $ (0.04) | --- |
| Figures in millions of pesos. | ||||
| EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | ||||
| The number of CPOs outstanding as of June 30, 2012 was 2,985 million and as of June 30, 2013 was 2,984 million. | ||||
Net sales
Domestic ad sales were Ps.2,601 million in the period, compared to Ps.2,706 million for the same period of the previous year.
Additionally, the company registered sales from Azteca America—the company's wholly-owned broadcast television network focused on the U.S. Hispanic market—of Ps.173 million, compared to Ps.229 million a year ago.
Content sales to other countries were Ps.46 million in the period, from Ps.59 million in the previous year; revenue for the quarter resulted from the exports of programs such as Vivir a Destiempo in Central and South America, Destino in Europe and Asia, and La Otra Cara del Alma in Europe, Asia and Central America.
Costs and expenses
Costs and expenses decreased 3% during the period, as a result of a 3% reduction in production, programming and transmission costs—to Ps.1,599 million from Ps.1,650 million in the same period a year ago—and a 1% decrease in selling and administrative expenses—to Ps.374 million, compared to Ps.379 million in the same quarter of 2012.
The reduction in costs results from growing efficiency in the production of successful content, derived from solid strategies that control disbursements effectively; while the performance of sales and administrative expenses is mainly related to lesser operations and travelling expenses in the period.
EBITDA and net result
EBITDA was Ps.847 million, compared to Ps.966 million in the same period of last year; the most significant change below EBITDA was a Ps.44 million improvement in the comprehensive financing result, derived from a reduction in other financing expenses.
Net loss for the quarter was Ps.85 million, from a net income of Ps.40 million last year.
Debt
As of June 30, 2013, Azteca´s outstanding debt—excluding Ps.1,560 million debt due in 2069—was Ps.8,781 million, 9% below the Ps.9,621 million from the previous year.
The cash balance of the company was Ps.6,877 million, compared to Ps.7,764 million a year ago. As a result, net debt was Ps.1,904 million, from Ps.1,857 million from the prior year. Debt to last twelve months (LTM) EBITDA ratio was 2.1 times, and net debt to LTM EBITDA was 0.5 times.
Fiber optic network
At the end of the quarter, Azteca installed 12,000 kilometers of fiber optic cable in Colombia, as part of a telecommunications project that will include a 19,000 kilometer network. Current coverage includes 452 municipalities, with the final goal of 753 where the network will be deployed.
As previously announced, Azteca is building in Colombia the largest fiber optic network in Latin America. The network represents a significant increase in the telecommunications service infrastructure; according to estimates by the Colombian government, the number of municipalities covered with fiber optic will increase from 27% to 96%, which facilitates the development of Colombia.
The commercialization of telecommunications services will diversify and strengthen Azteca revenue sources, adding to existing solid results in the media business. The Colombian government is contributing about US$235 million for the network construction.
Six months results
Net sales in the semester were Ps.5,236 million, compared to the Ps.5,745 million of the previous year. Total costs and expenses were Ps.3,776 million, 4% below the Ps.3,929 million for the same period of 2012, derived mainly from strict budgeting and effective control in disbursements for content production.
Azteca reported EBITDA of Ps.1,460 million, compared to Ps.1,816 million from the prior year; EBITDA margin was 28% for the period. The company recorded net income of Ps.67 million, compared to Ps.478 million for the same period of 2012.
| 6M 2012 | 6M 2013 | Change | ||
| Ps. | % | |||
| Net sales | $ 5,745 | $ 5,236 | $ (508) | -9% |
| EBITDA | $ 1,816 | $ 1,460 | $ (356) | -20% |
| Net income | $ 478 | $ 67 | $ (411) | -86% |
| Net income per CPO | $ 0.16 | $ 0.02 | $ (0.14) | -86% |
| Figures in millions of pesos. | ||||
| EBITDA: Operating Profit Before Depreciation and Amortization. | ||||
| The number of CPOs outstanding as of June 30, 2012 was 2,985 million and as of June 30, 2013 was 2,984 million. | ||||
Company Profile
Azteca is one of the two largest producers of Spanish-language television programming in the world, operating two national television networks in Mexico, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across the country. Azteca affiliates include Azteca America Network, a broadcast television network focused on the rapidly growing U.S. Hispanic market, and Azteca Web, an Internet company for North American Spanish speakers.
Azteca is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, contributing to build the middle class of the countries in which they operate, and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com), Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. The companies include: Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Advance America (www.advanceamerica.net), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx) and Grupo Iusacell (www.iusacell.com). Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, member companies share a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.
Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Other risks that may affect Azteca and its subsidiaries are identified in documents sent to securities authorities.
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| CONSOLIDATED RESULTS OF OPERATIONS | ||||||
| (Millions of Mexican pesos of June 31 of 2012 and 2013 ) | ||||||
| Second Quarter of : | ||||||
| 2012 | 2013 | |||||
| Change | ||||||
| Net revenue | Ps 2,994 | 100% | Ps 2,820 | 100% | Ps (174) | -6% |
| Programming, production and transmission costs | 1,650 | 55% | 1,599 | 57% | (50) | -3% |
| Selling and administrative expenses | 379 | 13% | 374 | 13% | (5) | -1% |
| Total costs and expenses | 2,028 | 68% | 1,973 | 70% | (55) | -3% |
| EBITDA | 966 | 32% | 847 | 30% | (119) | -12% |
| Depreciation and amortization | 140 | 144 | 3 | |||
| Other expense -Net | 94 | 150 | 56 | |||
| Operating profit | 732 | 24% | 553 | 20% | (179) | -24% |
| Equity in income from affiliates | (13) | 1 | 14 | |||
| Comprehensive financing result: | ||||||
| Interest expense | (245) | (224) | 21 | |||
| Other financing expense | (109) | (49) | 61 | |||
| Interest income | 66 | 45 | (21) | |||
| Exchange loss -Net | (210) | (227) | (18) | |||
| (499) | (455) | 44 | ||||
| Income before the following provision | 221 | 7% | 99 | 4% | (121) | -55% |
| Provision for income tax | (184) | (188) | (4) | |||
| Net income | Ps 37 | Ps (89) | Ps (125) | |||
| Non-controlling share in net profit | Ps (4) | Ps (4) | Ps 0 | |||
| Controlling share in net profit | Ps 40 | 1% | Ps (85) | -3% | Ps (125) | -311% |
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| CONSOLIDATED RESULTS OF OPERATIONS | ||||||
| (Millions of Mexican pesos of June 31 of 2012 and 2013 ) | ||||||
| Period ended June 30, | ||||||
| 2012 | 2013 | |||||
| Change | ||||||
| Net revenue | Ps 5,745 | 100% | Ps 5,236 | 100% | Ps (508) | -9% |
| Programming, production and transmission costs | 3,205 | 56% | 3,022 | 58% | (183) | -6% |
| Selling and administrative expenses | 724 | 13% | 754 | 14% | 30 | 4% |
| Total costs and expenses | 3,929 | 68% | 3,776 | 72% | (153) | -4% |
| EBITDA | 1,816 | 32% | 1,460 | 28% | (356) | -20% |
| Depreciation and amortization | 270 | 292 | 23 | |||
| Other expense -Net | 152 | 209 | 57 | |||
| Operating profit | 1,395 | 24% | 959 | 18% | (436) | -31% |
| Equity in income from affiliates | 1 | (9) | (9) | |||
| Comprehensive financing result: | ||||||
| Interest expense | (489) | (464) | 24 | |||
| Other financing expense | (122) | (60) | 62 | |||
| Interest income | 120 | 87 | (33) | |||
| Exchange loss -Net | (9) | (20) | (12) | |||
| (500) | (459) | 41 | ||||
| Income before the following provision | 895 | 16% | 491 | 9% | (404) | -45% |
| Provision for income tax | (425) | (432) | (7) | |||
| Net income | Ps 471 | Ps 59 | Ps (411) | |||
| Non-controlling share in net profit | Ps (7) | Ps (7) | Ps (0) | |||
| Controlling share in net profit | Ps 478 | 8% | Ps 67 | 1% | Ps (411) | -86% |
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| (Millions of Mexican pesos of June 30 of 2012 and 2013) | ||||
| At June 30 | ||||
| 2012 | 2013 | |||
| Change | ||||
| Current assets: | ||||
| Cash and cash equivalents | Ps 7,764 | Ps 6,877 | Ps (887) | |
| Accounts receivable | 7,270 | 6,347 | (923) | |
| Other current assets | 2,381 | 2,660 | 279 | |
| Total current assets | 17,415 | 15,884 | (1,531) | -9% |
| Exhibition rights | 1,367 | 1,792 | 425 | |
| Property, plant and equipment-Net | 3,480 | 3,411 | (69) | |
| Television concessions-Net | 7,721 | 7,721 | -- | |
| Other assets | 1,280 | 1,885 | 605 | |
| Deferred income tax asset | 4,286 | 4,672 | 386 | |
| Total long term assets | 18,134 | 19,481 | 1,347 | 7% |
| Total assets | Ps 35,549 | Ps 35,365 | Ps (184) | -1% |
| Current liabilities: | ||||
| Short-term debt | Ps 667 | Ps 667 | Ps -- | |
| Other current liabilities | 2,672 | 2,639 | (33) | |
| Total current liabilities | 3,339 | 3,306 | (33) | -1% |
| Long-term debt: | ||||
| Structured Securities Certificates | 4,944 | 4,278 | (666) | |
| Long-term debt | 4,010 | 3,836 | (174) | |
| Total long-term debt | 8,954 | 8,114 | (840) | |
| Other long term liabilities: | ||||
| Advertising advances | 7,664 | 6,951 | (713) | |
| American Tower Corporation (due 2069) | 1,635 | 1,560 | (75) | |
| Deferred income tax asset | 3,106 | 3,463 | 357 | |
| Total other long-term liabilities | 12,405 | 11,974 | (431) | -3% |
| Total liabilities | 24,698 | 23,394 | (1,304) | -5% |
| Total stockholders' equity | 10,851 | 11,971 | 1,120 | 10% |
| Total liabilities and equity | Ps 35,549 | Ps 35,365 | Ps (184) | -1% |