—Solid 24% increase in operating income, to Ps.958 million in the period—
—Growing demand for advertising spaces on TV Azteca´s platforms, resulted into a 16% increase in net sales, to Ps.4,082 million—
MEXICO CITY, Feb. 25, 2020 (GLOBE NEWSWIRE) -- TV Azteca, S.A.B. de C.V. (BMV: AZTECACPO; Latibex: XTZA), one of the two largest producers of Spanish-language television programming in the world, today announced fourth quarter 2019 and full year 2019 financial results.
"People are watching TV Azteca more than ever, as a result of agile, dynamic content with the best quality,” commented Benjamín Salinas, CEO of TV Azteca. “This is reflected in the fact that 40% of Mexicans with the highest purchasing power are tuning in TV Azteca’s prime time, and with the increased advertising demand in the quarter, we will boost a new commercialization model with enhanced screens,” he concluded.
Fourth Quarter Results
Net revenue for the period was Ps.4,082 million, 16% higher than the Ps.3,516 million for the same quarter of last year. Total costs and expenses were Ps.2,863 million, in comparison to Ps.2,458 million for the previous year.
As a result, TV Azteca reported EBITDA of Ps.1,219 million, from Ps.1,058 million a year ago. The EBITDA margin for the quarter was 30%, constant from a year ago. Operating income was Ps.958 million, 24% higher from Ps.771 million a year ago.
The company registered a net income of Ps.1,132 million, from a net loss of Ps.113 million for the same period in 2018.
| 4Q 2018 | 4Q 2019 | Change | ||||||
| Ps. | % | |||||||
| Net sales | $3,516 | $4,082 | $566 | 16% | ||||
| EBITDA | $1,058 | $1,219 | $161 | 15% | ||||
| Operating income | $771 | $958 | $186 | 24% | ||||
| Net result | $(113) | $1,132 | $1,245 | ---- | ||||
| Net result per CPO | $(0.04) | $0.38 | $0.42 | ---- | ||||
| Figures in millions of pesos. | ||||||||
| EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | ||||||||
| The number of CPOs outstanding as of December 31, 2018 was 2,987 million and as of December 31, 2019 was 2,984 million. | ||||||||
Net sales
Advertising sales in Mexico increased 17%, to Ps.3,927 million, from Ps.3,345 million the previous year, as a result of solid advertising spending from domestic advertisers in the framework of successful programming of TV Azteca in the quarter.
During this period, content sales to other countries were Ps.27 million in comparison with Ps.42 million from the previous year. Revenue for the quarter resulted mainly from the commercialization of the shows La fiscal de hierro, Vuélveme a querer and Las Bravo in Europe, as well as the sale of TV Azteca´s signals to the rest of the world.
Revenue from TV Azteca Guatemala and TV Azteca Honduras was Ps.30 million, in comparison with Ps.32 million of the previous year.
Azteca Comunicaciones Perú reported revenue of Ps.98 million, in comparison to Ps.97 million a year ago. Revenue resulted from telecommunications services and reimbursements from the Peruvian government for maintenance and operation of the fiber optic network.
Costs and SG&A Expenses
Total costs and expenses increased 16% in the quarter as a result of a 18% increase in production, programming, transmission and telecommunications services costs to Ps.2,443 million, from Ps.2,070 million a year ago, and an 8% increase in sales and administrative expenses, to Ps.421 million, compared to Ps.388 million in the previous year.
The increase in costs results from efforts to produce higher quality programs that have a positive impact on net sales.
The costs of Azteca Comunicaciones Perú were Ps.87 million, from Ps.93 million a year ago. The lower costs derive from transmission infrastructure rent reduction, operations efficiencies and lower advisory fees.
The increase in expenses at TV Azteca reflects higher service and operating expenses, partially offset by lower personnel expenses this quarter.
EBITDA and net results
Consolidated EBITDA of the company was Ps.1,219 million, compared to Ps.1,058 million for the same period of the prior year. Operating profit was Ps.958 million, from Ps.771 million a year ago.
Significant variations below EBITDA were the following:
An increase of Ps.84 million in other financial expenses, due to operating costs from factoring and coverage of financial instruments in the period.
A foreign exchange gain of Ps.306 million this quarter in comparison to a loss in foreign exchange for Ps.269 million a year ago, as a result of a net liability monetary balance in dollars in the company, along with appreciation of the peso this quarter, compared with a depreciation a year ago.
A benefit in tax provision for Ps.631 million this period, in comparison with a charge of Ps.220 million a year ago. The benefit this quarter derives from the partial release of the deferred tax asset reserve, based on an analysis of the company's tax loss recovery, which considers the financial and fiscal estimate of future results.
Growth of Ps.268 million in discontinued operations, as a result of the deconsolidation of the Atlas soccer team in the results of TV Azteca, which was previously announced.
TV Azteca registered net income of Ps.1,132 million for the quarter, compared to a net loss of Ps.113 million for the same period a year ago.
Cash Flow
During the period that ended on December 31, 2019, TV Azteca generated net cash flow from operations of Ps.2,544 million, in comparison to Ps.3,845 million of the previous year.
Once the flows of investment and financing activities were included, the generation of cash and cash equivalents of the company was Ps.581 million in the period, which contributed to strengthening TV Azteca's balance sheet.
Debt
As of December 31, 2019, TV Azteca’s outstanding debt was Ps.13,114 million, in comparison to Ps.13,396 million in the previous year.
The cash and cash equivalents balance at the end of the quarter, summed up at Ps.2,283 million, 34% above the Ps.1,702 million a year ago. Net debt of the company as of December 31, 2019 was Ps.10,831 million, in comparison to Ps.11,694 million in the previous year.
Twelve-month results
Net sales for 2019 were Ps.12,814 million, in comparison with Ps.13,680 million for the previous year. The reduction results from lower advertising investment by the federal government this period, as well as revenues related to the Soccer World Cup, a year ago.
Total costs and expenses were Ps.10,231 million, a 6% reduction from Ps.10,866 million for the same period of the previous year, mainly from costs related to the transmission of the Soccer World Cup in Russia in 2018.
TV Azteca reported EBITDA of Ps.2,584 million, compared to Ps.2,814 million from the previous year. EBITDA margin for 2019 was 20%. Operating profit was Ps.1,525 million, from Ps.1,647 million a year ago. The company reported a net gain of Ps.1,050 million, compared to a net loss of Ps.652 million in 2018.
| 2018 | 2019 | Change | |||||
| Ps. | % | ||||||
| Net sales | $13,680 | $12,814 | $(866) | -6% | |||
| EBITDA | $2,814 | $2,584 | $(230) | -8% | |||
| Operating profit | $1,647 | $1,525 | $(122) | -7% | |||
| Net result | $(652) | $1,050 | $1,702 | ---- | |||
| Net result per CPO | $(0.22) | $0.35 | $0.57 | ---- | |||
| Figures in millions of pesos. | |||||||
| EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | |||||||
| The number of CPOs outstanding as of December 31, 2018 was 2,987 million and as of December 31, 2019 was 2,984 million. | |||||||
About TV Azteca
TV Azteca is one of the two largest producers of Spanish-language television programming in the world, operating four television networks in Mexico: Azteca uno, Azteca 7, adn40 and a+, through more than 300 owned and operated stations across the country. The company also operates TV Azteca Digital, the operator of several Mexico’s most visited websites and social media platforms.
TV Azteca is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast growing, and technologically advanced companies focused on creating: economic value through market innovation and goods and services that improve standards of living; social value to improve community wellbeing; and environmental value by reducing the negative impact of its business activities. 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. These companies include TV Azteca (www.TVazteca.com; www.irtvazteca.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), Punto Casa de Bolsa (www.puntocasadebolsa.mx), Totalplay (www.totalplay.com.mx) and Totalplay Empresarial (totalplayempresarial.com.mx). TV Azteca and Grupo Elektra trade shares on the Mexican Stock Market and in Spains' Latibex market. Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. The group of companies shares 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 concepts about the future that involve risks and uncertainty that may cause actual results to differ materially from those projected. Other risks that may affect TV Azteca and its subsidiaries are presented in documents sent to the securities authorities.
Investor Relations:
| Bruno Rangel Grupo Salinas Tel. +52 (55) 2601-5400, ext. 11502 jrangelk@gruposalinas.com.mx | Rolando Villarreal TV Azteca, S.A.B. de C.V. Tel. +52 (55) 2601-5400, ext. 11508 rvillarreal@gruposalinas.com.mx | |
| Press Relations: Luciano Pascoe Tel. +52 (55) 1720 1313 ext. 36553 lpascoe@gruposalinas.com.mx | ||
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED RESULTS OF OPERATIONS | |||||||||||||||
| (Millions of Mexican pesos of December 31 of 2018 and 2019 ) | |||||||||||||||
| Fourth Quarter of : | |||||||||||||||
| 2018 | 2019 | ||||||||||||||
| Change | |||||||||||||||
| Net revenue | Ps | 3,516 | 100 | % | Ps | 4,082 | 100 | % | Ps | 566 | 16 | % | |||
| Programming, production and transmission costs | 2,070 | 59 | % | 2,443 | 60 | % | 372 | 18 | % | ||||||
| Selling and administrative expenses | 388 | 11 | % | 421 | 10 | % | 33 | 8 | % | ||||||
| Total costs and expenses | 2,458 | 70 | % | 2,863 | 70 | % | 405 | 16 | % | ||||||
| EBITDA | 1,058 | 30 | % | 1,219 | 30 | % | 161 | 15 | % | ||||||
| Depreciation and amortization | 171 | 187 | 16 | ||||||||||||
| Other expense -Net | 116 | 75 | (41 | ) | |||||||||||
| Operating profit | 771 | 22 | % | 958 | 23 | % | 186 | 24 | % | ||||||
| Equity in income from affiliates | (27 | ) | (21 | ) | 6 | ||||||||||
| Comprehensive financing result: | |||||||||||||||
| Interest expense | (343 | ) | (337 | ) | 6 | ||||||||||
| Other financing expense | (18 | ) | (102 | ) | (84 | ) | |||||||||
| Interest income | 75 | 47 | (28 | ) | |||||||||||
| Exchange loss -Net | (269 | ) | 306 | 575 | |||||||||||
| (555 | ) | (86 | ) | 469 | |||||||||||
| Income before the following provision | 189 | 5 | % | 851 | 21 | % | 662 | ||||||||
| Provision for income tax | (220 | ) | 631 | 851 | |||||||||||
| Profit (Loss) from continuing operations | (31 | ) | 1,482 | 1,513 | |||||||||||
| Profit (loss) from discontinued operations | (82 | ) | (350 | ) | (268 | ) | |||||||||
| Net income | Ps | (113 | ) | Ps | 1,132 | Ps | 1,245 | ||||||||
| Non-controlling share in net profit | Ps | (4 | ) | Ps | 0 | Ps | 4 | ||||||||
| Controlling share in net profit | Ps | (109 | ) | -3 | % | Ps | 1,132 | 28 | % | Ps | 1,241 | ||||
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED RESULTS OF OPERATIONS | |||||||||||||||
| (Millions of Mexican pesos of December 31 of 2018 and 2019 ) | |||||||||||||||
| Period ended December 31, | |||||||||||||||
| 2018 | 2019 | ||||||||||||||
| Change | |||||||||||||||
| Net revenue | Ps | 13,680 | 100 | % | Ps | 12,814 | 100 | % | Ps | (866 | ) | -6 | % | ||
| Programming, production and transmission costs | 9,395 | 69 | % | 8,676 | 68 | % | (719 | ) | -8 | % | |||||
| Selling and administrative expenses | 1,472 | 11 | % | 1,555 | 12 | % | 83 | 6 | % | ||||||
| Total costs and expenses | 10,866 | 79 | % | 10,231 | 80 | % | (636 | ) | -6 | % | |||||
| EBITDA | 2,814 | 21 | % | 2,584 | 20 | % | (230 | ) | -8 | % | |||||
| Depreciation and amortization | 721 | 761 | 40 | ||||||||||||
| Other expense -Net | 446 | 298 | (148 | ) | |||||||||||
| Operating profit | 1,647 | 12 | % | 1,525 | 12 | % | (122 | ) | -7 | % | |||||
| Equity in income from affiliates | (36 | ) | (43 | ) | (7 | ) | |||||||||
| Comprehensive financing result: | |||||||||||||||
| Interest expense | (1,310 | ) | (1,353 | ) | (43 | ) | |||||||||
| Other financing expense | (166 | ) | (236 | ) | (70 | ) | |||||||||
| Interest income | 194 | 143 | (51 | ) | |||||||||||
| Exchange Gain -Net | 44 | 272 | 228 | ||||||||||||
| (1,237 | ) | (1,173 | ) | 64 | |||||||||||
| Income before the following provision | 374 | 3 | % | 309 | 2 | % | (65 | ) | |||||||
| Provision for income tax | (940 | ) | 1,251 | 2,191 | |||||||||||
| Profit (Loss) from continuing operations | (565 | ) | 1,560 | 2,126 | |||||||||||
| Profit (loss) from discontinued operations | (86 | ) | (510 | ) | (423 | ) | |||||||||
| Net income | Ps | (652 | ) | Ps | 1,050 | Ps | 1,702 | ||||||||
| Non-controlling share in net profit | Ps | (5 | ) | Ps | 0 | Ps | 5 | ||||||||
| Controlling share in net profit | Ps | (647 | ) | -5 | % | Ps | 1,050 | 8 | % | Ps | 1,697 | ||||
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||
| (Millions of Mexican pesos of September 30 of 2018 and 2019) | |||||||||||
| At December 31 | |||||||||||
| 2018 | 2019 | ||||||||||
| Change | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | Ps | 1,702 | Ps | 2,283 | Ps | 581 | |||||
| Accounts receivable | 3,703 | 3,588 | (115 | ) | |||||||
| Other current assets | 4,504 | 3,344 | (1,160 | ) | |||||||
| Total current assets | 9,909 | 9,215 | (694 | ) | -7 | % | |||||
| Accounts receivable | 76 | 22 | (54 | ) | |||||||
| Exhibition rights | 2,115 | 2,405 | 290 | ||||||||
| Property, plant and equipment-Net | 3,533 | 3,726 | 193 | ||||||||
| Television concessions-Net | 9,427 | 9,444 | 17 | ||||||||
| Other assets | 2,140 | 1,318 | (822 | ) | |||||||
| Deferred income tax asset | 788 | 2,551 | 1,763 | ||||||||
| Total long term assets | 18,079 | 19,466 | 1,387 | 8 | % | ||||||
| Total assets | Ps | 27,988 | Ps | 28,681 | Ps | 693 | 2 | % | |||
| Current liabilities: | |||||||||||
| Short-term debt | Ps | - | Ps | 1,708 | Ps | 1,708 | |||||
| Other current liabilities | 5,015 | 5,937 | 922 | ||||||||
| Total current liabilities | 5,015 | 7,645 | 2,630 | 52 | % | ||||||
| Long-term debt: | |||||||||||
| Securities Certificates | 3,960 | 3,975 | 15 | ||||||||
| Long-term debt | 9,436 | 7,431 | (2,005 | ) | |||||||
| Total long-term debt | 13,396 | 11,406 | (1,990 | ) | -15 | % | |||||
| Other long term liabilities: | |||||||||||
| Advertising advances | 5,180 | 4,956 | (224 | ) | |||||||
| Deferred income tax | 721 | 529 | (192 | ) | |||||||
| Other long term liabilities | 199 | 499 | 300 | ||||||||
| Total other long-term liabilities | 6,100 | 5,984 | (116 | ) | -2 | % | |||||
| Total liabilities | 24,511 | 25,035 | 524 | 2 | % | ||||||
| Total stockholders' equity | 3,477 | 3,646 | 169 | 5 | % | ||||||
| Total liabilities and equity | Ps | 27,988 | Ps | 28,681 | Ps | 693 | 2 | % | |||
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (Millions of Mexican pesos of December 31 of 2018 and 2019 ) | |||||||
| Period ended December 31, | |||||||
| 2018 | 2019 | ||||||
| Operating activities: | |||||||
| Cash flow generated before taxes to income | Ps | 2,220 | Ps | 2,058 | |||
| Accounts receivable | 1,685 | 200 | |||||
| Inventories and performance rights | 565 | 459 | |||||
| Accounts payable, accrued expenses and taxes on earnings | (625 | ) | (173 | ) | |||
| Net cash flow from operating activities | 3,845 | 2,544 | |||||
| Investing activities: | |||||||
| Acquisitions of property and equipment, intangibles and others | (288 | ) | (348 | ) | |||
| Renewal of Concessions | (3,940 | ) | - | ||||
| Net cash flows from investing activities | (4,228 | ) | (348 | ) | |||
| Financing activities: | |||||||
| Proceeds from borrowings | 626 | - | |||||
| Interest paid | (1,310 | ) | (1,353 | ) | |||
| Others | (14 | ) | (261 | ) | |||
| Net cash flows from financing activities | (698 | ) | (1,614 | ) | |||
| Increase in cash and cash equivalents | (1,081 | ) | 581 | ||||
| Cash and cash equivalents at beginning of year | 2,783 | 1,702 | |||||
| Cash and cash equivalents at end of year | Ps | 1,702 | Ps | 2,283 | |||