—Net sales grow 5% to Ps.3,816 million—
—Solid Progress in the construction of the largest fiber optic network in Latin America—
MEXICO CITY, Feb. 27, 2014 (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 fourth quarter, and full year 2013.
Fourth quarter results
"We generated superior revenue during the quarter, as a result of growing demand for advertising slots in our solid full day programming grid," commented Mario San Roman, CEO of Azteca. "The higher sales were compatible with additional operating efficiency, which expanded EBITDA and profitability margins in the period."
Net sales were Ps.3,816 million, 5% above the Ps.3,627 million for the same quarter of last year. Total costs and expenses were Ps.2,103 million, 4% above the Ps.2,019 million in the same period of the previous year.
As a result, Azteca reported EBITDA of Ps.1,713 million, 7% more than the Ps.1,608 million for the same period of last year. The EBITDA margin was 45%, one percentage point higher than the previous year. Net income was Ps.771 million, compared to Ps.1,111 million from the same quarter in 2012.
| 4Q 2012 | 4Q 2013 | Change | ||
| Ps. | % | |||
| Net sales | $3,627 | $3,816 | $189 | 5% |
| EBITDA | $1,608 | $1,713 | $105 | 7% |
| Net income | $1,111 | $771 | $(340) | -31% |
| Net income per CPO | $0.37 | $0.26 | $(0.11) | -31% |
| Figures in millions of pesos. | ||||
| EBITDA: Operating Profit Before Depreciation and Amortization. | ||||
| The number of CPOs outstanding as of December 31, 2012, as well as of December 2013 was 2,984 million. | ||||
Net sales
Domestic ad sales were Ps.3,525 million in the quarter, 4% above the Ps.3,402 million from the fourth quarter of 2012. The increase in sales was complemented by revenue from Azteca America —the company's wholly-owned broadcast television network focused on the U.S. Hispanic market— of Ps.222 million, 17% above the Ps.190 million a year ago, in the context of superior preference of advertisers to reach their targeted market segments through the company's programing.
Content sales to other countries were Ps.69 million in the quarter, from Ps.35 million from the previous year. The revenue was mainly related to the export of the programs Corazón en condominio and Hombre tenías que ser, to Central and South America.
Costs and expenses
The 4% increase in costs and expenses was the result of a 5% growth in production, programming and transmission costs —to Ps.1,686 million, from Ps.1,611 million in the same period a year ago— and a 2% increase in selling and administrative expenses —to Ps.417 million, from Ps.408 million in the same quarter of 2012.
The smaller increase in total costs and expenses compared to revenue is the result of strict budgeting in content production, as well as solid strategies that generate additional operating efficiencies, effectively controlling the company's expenditures.
EBITDA and net income
EBITDA was Ps.1,713 million, 7% above the Ps.1,608 million in the same period of the prior year.
The most significant change below EBITDA was a Ps.227 million increase in other financial expenses, as a result of the commissions related to the prepayment of debt during the quarter.
Net income for the quarter was Ps.771 million, compared to Ps.1,111 million from a year ago.
Debt
As of December 31, 2013, Azteca's outstanding debt —excluding Ps.1,199 million debt due in 2069—was Ps.10,195 million. The cash balance of the company was Ps.4,527 million. As a result, net debt was Ps.5,668 million at the end of the quarter.
Debt to last twelve months (LTM) EBITDA ratio was 2.5 times, and net debt to LTM EBITDA was 1.4 times.
Fiber optics network in Colombia
During the quarter Azteca made solid progress in the construction of a fiber optic network that will cover close to 80% of Colombian territory. At the end of December, there were 14,700 kilometers already built in 602 municipalities, of a total of 753 municipalities to be covered at the end of the project, which will be deployed through 19,000 kilometers.
As previously announced, Azteca is building in Colombia the largest fiber optic network in Latin America, and will sell telecommunications services in the country. The commercialization of telecommunications services will diversify and strengthen Azteca revenue sources, adding to existing solid results in the media business.
Twelve months results
Net sales in 2013 were Ps.12,068 million, compared to Ps.12,570 million from the previous year. The redefinition of communication projects from the incoming federal government, as well as a hard comparison related to the additional income related to the Olympic Games in 2012 are the main causes for the reduction in net sales.
Total costs and expenses were Ps.7,924 million, 2% below the Ps.8,087 million in 2012, resulting from strict control of disbursements related to the production of content.
Azteca reported EBITDA of Ps.4,144 million, compared to Ps.4,483 million from the prior year; the EBITDA margin for the year was 34%. The company recorded net income of Ps.1,168 million, compared to Ps.2,307 million from the previous year, in the context of a deterioration in the comprehensive financial cost.
| 2012 | 2013 | Change | ||
| Ps. | % | |||
| Net sales | $12,570 | $12,068 | $(502) | -4% |
| EBITDA | $4,483 | $4,144 | $(339) | -8% |
| Net income | $2,307 | $1,168 | $(1,139) | -49% |
| Net income per CPO | $0.77 | $0.39 | $(0.38) | -49% |
| Figures in millions of pesos. | ||||
| EBITDA: Operating Profit Before Depreciation and Amortization. | ||||
| The number of CPOs outstanding as of December 31, 2012, as well as of December 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 December 31 of 2012 and 2013 ) | ||||||
| Fourth Quarter of: | ||||||
| 2012 | 2013 | |||||
| Change | ||||||
| Net revenue | Ps 3,627 | 100% | Ps 3,816 | 100% | Ps 189 | 5% |
| Programming, production and transmission costs | 1,611 | 44% | 1,686 | 44% | 75 | 5% |
| Selling and administrative expenses | 408 | 11% | 417 | 11% | 9 | 2% |
| Total costs and expenses | 2,019 | 56% | 2,103 | 55% | 84 | 4% |
| EBITDA | 1,608 | 44% | 1,713 | 45% | 105 | 7% |
| Depreciation and amortization | 144 | 154 | 10 | |||
| Other expense -Net | 123 | 275 | 152 | |||
| Operating profit | 1,341 | 37% | 1,284 | 34% | (57) | -4% |
| Equity in income from affiliates | 29 | 12 | (17) | |||
| Comprehensive financing result: | ||||||
| Interest expense | (239) | (330) | (91) | |||
| Other financing expense | 40 | (186) | (227) | |||
| Interest income | 51 | 54 | 3 | |||
| Exchange loss -Net | (52) | (9) | 42 | |||
| (199) | (471) | (272) | ||||
| Income before the following provision | 1,171 | 32% | 824 | 22% | (347) | -30% |
| Provision for income tax | (58) | (51) | 7 | |||
| Net income | Ps 1,113 | Ps 773 | Ps (340) | |||
| Non-controlling share in net profit | Ps 2 | Ps 2 | Ps (1) | |||
| Controlling share in net profit | Ps 1,111 | 31% | Ps 771 | 20% | Ps (340) | -31% |
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| CONSOLIDATED RESULTS OF OPERATIONS | ||||||
| (Millions of Mexican pesos of December 31 of 2012 and 2013 ) | ||||||
| Period ended December 31, | ||||||
| 2012 | 2013 | |||||
| Change | ||||||
| Net revenue | Ps 12,570 | 100% | Ps 12,068 | 100% | Ps (502) | -4% |
| Programming, production and transmission costs | 6,577 | 52% | 6,368 | 53% | (209) | -3% |
| Selling and administrative expenses | 1,510 | 12% | 1,556 | 13% | 46 | 3% |
| Total costs and expenses | 8,087 | 64% | 7,924 | 66% | (164) | -2% |
| EBITDA | 4,483 | 36% | 4,144 | 34% | (339) | -8% |
| Depreciation and amortization | 556 | 600 | 43 | |||
| Other expense -Net | 331 | 620 | 289 | |||
| Operating profit | 3,595 | 29% | 2,925 | 24% | (671) | -19% |
| Equity in income from affiliates | 36 | 5 | (32) | |||
| Comprehensive financing result: | ||||||
| Interest expense | (972) | (1,032) | (60) | |||
| Other financing expense | (98) | (251) | (152) | |||
| Interest income | 223 | 173 | (49) | |||
| Exchange Gain -Net | 132 | (39) | (171) | |||
| (715) | (1,148) | (432) | ||||
| Income before the following provision | 2,916 | 23% | 1,781 | 15% | (1,135) | -39% |
| Provision for income tax | (619) | (623) | (4) | |||
| Net income | Ps 2,297 | Ps 1,159 | Ps (1,139) | |||
| Non-controlling share in net profit | Ps (10) | Ps (10) | Ps 0 | |||
| Controlling share in net profit | Ps 2,307 | 18% | Ps 1,168 | 10% | Ps (1,139) | -49% |
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| (Millions of Mexican pesos of December 31 of 2012 and 2013) | ||||
| At December 31 | ||||
| 2012 | 2013 | |||
| Change | ||||
| Current assets: | ||||
| Cash and cash equivalents | Ps 6,446 | Ps 4,527 | Ps (1,919) | |
| Accounts receivable | 5,414 | 6,446 | 1,032 | |
| Other current assets | 2,915 | 3,254 | 339 | |
| Total current assets | 14,775 | 14,227 | (548) | -4% |
| Accounts receivable | 480 | 374 | (106) | |
| Exhibition rights | 1,505 | 2,108 | 603 | |
| Property, plant and equipment-Net | 3,465 | 3,523 | 58 | |
| Television concessions-Net | 7,721 | 7,760 | 39 | |
| Other assets | 1,544 | 3,012 | 1,468 | |
| Deferred income tax asset | 4,535 | 4,672 | 137 | |
| Total long term assets | 19,250 | 21,449 | 2,199 | 11% |
| Total assets | Ps 34,025 | Ps 35,676 | Ps 1,651 | 5% |
| Current liabilities: | ||||
| Short-term debt | Ps 667 | Ps -- | Ps (667) | |
| Other current liabilities | 2,369 | 3,280 | 911 | |
| Advertising advances | -- | -- | -- | |
| Total current liabilities | 3,036 | 3,280 | 244 | 8% |
| Long-term debt: | ||||
| Structured Securities Certificates | 4,611 | -- | (4,611) | |
| Long-term debt | 3,825 | 10,195 | 6,370 | |
| Total long-term debt | 8,436 | 10,195 | 1,759 | |
| Other long term liabilities: | ||||
| Advertising advances | 5,422 | 5,406 | (16) | |
| American Tower Corporation (due 2069) | 1,558 | 1,199 | (359) | |
| Deferred income tax asset | 3,463 | 3,463 | -- | |
| Total other long-term liabilities | 10,443 | 10,068 | (375) | -4% |
| Total liabilities | 21,915 | 23,543 | 1,628 | 7% |
| Total stockholders' equity | 12,110 | 12,133 | 23 | 0% |
| Total liabilities and equity | Ps 34,025 | Ps 35,676 | Ps 1,651 | 5% |