—Successfully concludes the construction of Latin America's largest fiber-optic network in Colombia—
—Starts deployment of Red Dorsal Nacional de Perú, which will cover close to 80% of the country with 13,400 kilometers of fiber optic cable—
—The start of operations in Colombia has associated costs, however, it will generate significant yields in the future—
MEXICO CITY, Feb. 24, 2015 (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 2014.
Fourth quarter results
Net sales were Ps.3,801 million compared to Ps.3,806 million for the same quarter of last year. Total costs and expenses were Ps.2,501 million from Ps.2,103 million in the same period of the previous year.
As a result, Azteca reported EBITDA of Ps.1,299 million compared to Ps.1,703 million for the same period of last year; EBITDA margin for the quarter was 34%. Net profit was Ps.170 million, compared to a net profit of Ps.762 million from the same quarter in 2013.
| 4T 2013 | 4T 2014 | Change | ||||||
| Ps. | % | |||||||
| Net Sales | $3,806 | $3,801 | $(5) | 0% | ||||
| EBITDA | $1,703 | $1,299 | $(403) | -24% | ||||
| Net result | $762 | $170 | $(592) | -78% | ||||
| Net result per CPO | $0.26 | $0.06 | $(0.20) | -78% | ||||
| Figures in millions of pesos. | ||||||||
| EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | ||||||||
| The number of CPOs outstanding as of December 31, 2013 was 2,984 million and as of December 31, 2014 was 2,985 million. | ||||||||
Net sales
National advertising sales were Ps.3,436 million, in comparison to Ps.3,526 million a year ago.
In addition, the company registered sales from Azteca America—the company's wholly-owned broadcast television network focused on the U.S. Hispanic market—of Ps.245 million this quarter, a 10% increase compared to Ps.222 million a year ago.
Content sales to other countries were Ps.34 million in the period, from Ps.32 million in the previous year; revenue for the quarter resulted from the commercialization of the shows Las Bravo in Africa and Europe, Siempre tuya Acapulco in South America and Lo que callamos las mujeres in Central America, as well as the sale of Azteca pay TV channels in the rest of the world.
Revenue from Azteca Guatemala and Azteca Honduras was Ps.20 million, in contrast with Ps.12 million for the previous year.
Sales from Azteca Comunicaciones Colombia —derived from telecommunications services through the fiber-optic network that the company operates in that country— were Ps.66 million, in comparison to Ps.14 million for the previous year.
Costs and expenses
Costs and expenses grew 19% during the period, as a result of a 22% increase in production, programming, transmission and telecommunications services costs —to Ps.2,055 million from Ps.1,686 million in the same period a year ago—and a 7% increase in selling and administrative expenses—to Ps.446 million, compared to Ps.417 million in the same quarter of 2013.
The growth in costs mainly derives from Colombian operations. However, the commercialization of telecommunications services in that country will generate solid yields in the future. Such costs include rent paid for the transmission towers and space to operate telecommunications nodes, as well as the maintenance and operation of the network.
The increase in costs also resulted from the consolidation of the Atlas soccer team into Azteca's results. As previously announced, the soccer team was acquired by the company in December 2013, which will give Azteca an important presence in one of Mexico's largest soccer markets.
The selling and administrative expenses grew mainly due to higher expenses for services and operation.
EBITDA and net result
EBITDA was Ps.1,299 million compared to Ps.1,703 million for the same period of the prior year.
The most significant change below EBITDA was a Ps.287 million increase in the comprehensive financing cost, mainly derived from a larger foreign exchange loss this quarter.
The company registered net income of Ps.170 million for the quarter, compared to a net profit of Ps.762 million for the same period a year ago
Debt
As of December 31, 2014, Azteca's outstanding debt—excluding Ps.1,353 million of debt due in 2069—was Ps.12,687 million. The cash and cash equivalents balance of the company was Ps.5,511 million; as a result, net debt was Ps.7,176 million at the end of the quarter.
Fiber-optic network in Colombia
During the quarter, Azteca Comunicaciones Colombia—a subsidiary of Azteca—finished the construction of the largest fiber optic network in Latin America, covering 80% of Colombian territory. The network spans 20,500 kilometers and reaches 769 municipalities throughout the country, where the company commercializes world class telecommunication services.
Such sales offering will result in strong revenue growth, which will result in diversification and strengthening of the results of Azteca. Sales contracts from the telecommunications services of the company over the next three years amount approximately US$180 million.
Fiber-optic network in Peru
During the quarter, Azteca Comunicaciones Peru—a subsidiary of Azteca—began deployment of the Red Dorsal Nacional de Perú which has an estimated 18-month construction.
As previously announced, in December 2013 Azteca won an auction to construct and operate a 13,400 kilometer fiber-optic network which will offer telecommunications services in approximately 80% of Peruvian territory. The government will provide the funds for the construction and operation through a 20 year concession, and Azteca will commercialize the telecommunications services in 339 population centers.
Twelve month results
Net sales in 2014 were Ps.12,871 million, 7% higher to Ps.12,058 million from 2013. Total costs and expenses were Ps.9,100 million from Ps.7,924 million for the previous year. The increase in costs mainly derives from exhibition rights and production and broadcasting costs related to the World Cup in Brazil, as well as the consolidation of Azteca Comunicaciones Colombia and the Atlas soccer team in the company results.
Azteca reported EBITDA of Ps.3,771 million compared to Ps.4,134 million for the previous year. EBITDA margin was 29% for 2014. The company registered net income of Ps.280 million, compared to Ps.1,158 million for 2013.
| 2013 | 2014 | Change | ||||||
| Ps. | % | |||||||
| Net sales | $12,058 | $12,871 | $813 | 7% | ||||
| EBITDA | $4,134 | $3,771 | $(363) | -9% | ||||
| Net result | $1,158 | $280 | $(878) | -76% | ||||
| Net results per CPO | $0.39 | $0.09 | $(0.29) | -76% | ||||
| Figures in millions of pesos. | ||||||||
| EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | ||||||||
| The number of CPOs outstanding as of December 31, 2013 was 2,984 million and as of December 31, 2014 was 2,985 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 US, 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), Totalplay (www.totalplay.com.mx) and Enlace TPE (www.enlacetpe.com.mx). 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 2013 and 2014 ) | ||||||
| Fourth Quarter of : | ||||||
| 2013 | 2014 | |||||
| Change | ||||||
| Net revenue | Ps 3,806 | 100% | Ps 3,801 | 100% | Ps (5) | 0% |
| Programming, production and transmission costs | 1,686 | 44% | 2,055 | 54% | 369 | 22% |
| Selling and administrative expenses | 417 | 11% | 446 | 12% | 29 | 7% |
| Total costs and expenses | 2,103 | 55% | 2,501 | 66% | 398 | 19% |
| EBITDA | 1,703 | 45% | 1,299 | 34% | (403) | -24% |
| Depreciation and amortization | 154 | 170 | 17 | |||
| Other expense -Net | 275 | 134 | (141) | |||
| Operating profit | 1,274 | 33% | 995 | 26% | (279) | -22% |
| Equity in income from affiliates | 12 | 6 | (6) | |||
| Comprehensive financing result: | ||||||
| Interest expense | (330) | (279) | 52 | |||
| Other financing expense | (186) | (19) | 167 | |||
| Interest income | 54 | 26 | (29) | |||
| Exchange result -Net | (9) | (486) | (477) | |||
| (471) | (759) | (287) | ||||
| Income before the following provision | 814 | 21% | 242 | 6% | (572) | -70% |
| Provision for income tax | (51) | (69) | (18) | |||
| Net income | Ps 763 | Ps 173 | Ps (590) | |||
| Non-controlling share in net profit | Ps 2 | Ps 3 | Ps 1 | |||
| Controlling share in net profit | Ps 762 | 20% | Ps 170 | 4% | Ps (591) | -78% |
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| CONSOLIDATED RESULTS OF OPERATIONS | ||||||
| (Millions of Mexican pesos of December 31 of 2013 and 2014 ) | ||||||
| Period ended December 31, | ||||||
| 2013 | 2014 | |||||
| Change | ||||||
| Net revenue | Ps 12,058 | 100% | Ps 12,871 | 100% | Ps 813 | 7% |
| Programming, production and transmission costs | 6,368 | 53% | 7,459 | 58% | 1,091 | 17% |
| Selling and administrative expenses | 1,556 | 13% | 1,641 | 13% | 86 | 6% |
| Total costs and expenses | 7,924 | 66% | 9,100 | 71% | 1,177 | 15% |
| EBITDA | 4,134 | 34% | 3,771 | 29% | (363) | -9% |
| Depreciation and amortization | 600 | 691 | 91 | |||
| Other expense -Net | 620 | 410 | (210) | |||
| Operating profit | 2,915 | 24% | 2,671 | 21% | (244) | -8% |
| Equity in income from affiliates | 5 | 23 | 18 | |||
| Comprehensive financing result: | ||||||
| Interest expense | (1,032) | (1,028) | 4 | |||
| Other financing expense | (251) | (87) | 164 | |||
| Interest income | 173 | 128 | (45) | |||
| Exchange Result -Net | (39) | (783) | (745) | |||
| (1,148) | (1,770) | (622) | ||||
| Income before the following provision | 1,771 | 15% | 924 | 7% | (847) | -48% |
| Provision for income tax | (623) | (654) | (31) | |||
| Net income | Ps 1,149 | Ps 270 | Ps (878) | |||
| Non-controlling share in net profit | Ps (10) | Ps (9) | Ps 0 | |||
| Controlling share in net profit | Ps 1,158 | 10% | Ps 280 | 2% | Ps (879) | -76% |
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| (Millions of Mexican pesos of December 31 of 2013 and 2014) | ||||
| At December 31 | ||||
| 2013 | 2014 | |||
| Change | ||||
| Current assets: | ||||
| Cash and cash equivalents | Ps 4,527 | Ps 5,511 | Ps 984 | |
| Accounts receivable | 6,446 | 6,414 | (32) | |
| Other current assets | 3,254 | 3,038 | (216) | |
| Total current assets | 14,227 | 14,963 | 736 | 5% |
| Accounts receivable | 374 | 71 | (303) | |
| Exhibition rights | 2,108 | 2,703 | 595 | |
| Property, plant and equipment-Net | 3,523 | 3,627 | 104 | |
| Television concessions-Net | 7,760 | 9,322 | 1,562 | |
| Other assets | 2,952 | 3,537 | 585 | |
| Deferred income tax asset | 3,128 | 3,128 | -- | |
| Total long term assets | 19,845 | 22,388 | 2,543 | 13% |
| Total assets | Ps 34,072 | Ps 37,351 | Ps 3,279 | 10% |
| Current liabilities: | ||||
| Short-term debt | Ps -- | Ps 1,106 | Ps 1,106 | |
| Other current liabilities | 2,976 | 4,164 | 1,188 | |
| Total current liabilities | 2,976 | 5,270 | 2,294 | 77% |
| Long-term debt: | ||||
| Structured Securities Certificates | -- | -- | -- | |
| Long-term debt | 10,195 | 11,581 | 1,386 | |
| Total long-term debt | 10,195 | 11,581 | 1,386 | |
| Other long term liabilities: | ||||
| Advertising advances | 5,416 | 5,331 | (85) | |
| American Tower Corporation (due 2069) | 1,199 | 1,353 | 154 | |
| Deferred income tax asset | 2,163 | 1,730 | (433) | |
| Total other long-term liabilities | 8,778 | 8,414 | (364) | -4% |
| Total liabilities | 21,949 | 25,265 | 3,316 | 15% |
| Total stockholders' equity | 12,123 | 12,086 | (37) | 0% |
| Total liabilities and equity | Ps 34,072 | Ps 37,351 | Ps 3,279 | 10% |