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Azteca Announces Sales of Ps.3,801 Million and EBITDA of Ps.1,299 Million for the Fourth Quarter of 2014

—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%

CONTACT: Investor Relations Bruno Rangel Grupo Salinas Tel. +52 (55) 1720-9167 jrangelk@gruposalinas.com.mx Rolando Villarreal Grupo Elektra S.A.B. de C.V. Tel. +52 (55) 1720-9167 rvillarreal@gruposalinas.com.mx Press Relations Luciano Pascoe Grupo Salinas Tel. +52 (55) 1720 1313 ext. 36553 lpascoe@gruposalinas.com.mx Daniel McCosh Grupo Salinas Tel. +52 (55) 1720-0059 dmccosh@gruposalinas.com.mxSource:TV Azteca, SAB de CV