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Azteca Announces Sales of Ps.3,627 Million and EBITDA of Ps.1,608 Million for the Fourth Quarter of 2012

Net Sales Grow to Ps.12,570 Million in 2012, EBITDA is Ps.4,483 Million

Solid Progress in Construction of Fiber Optics Network, Which Will Cover Close to 80% of the Territory of Colombia

MEXICO CITY, Feb. 21, 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 fourth quarter and full year 2012.

Fourth quarter results

Net sales for the quarter were Ps.3,627 million, compared to Ps.3,874 million for the same quarter of 2011. Total costs and expenses were Ps.2,019 million, 3% below Ps.2,092 million in the same period of the previous year. As a result, Azteca reported EBITDA of Ps.1,608 million, from Ps.1,782 million for the same period of last year. The EBITDA margin was 44%.

The company registered net income of Ps.1,111 million, compared to Ps.1,263 million for the same quarter of 2011.


4Q 2011 4Q 2012 Change
Ps. %
Net sales $3,874 $3,627 $(247) -6%
EBITDA $1,782 $1,608 $(174) -10%
Net income $1,263 $1,111 $(152) -12%
Net income per CPO $0.42 $0.37 $(0.05) -12%
Figures in millions of pesos.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
The number of CPOs outstanding as of December 31, 2011 was 2,985 million and as of December 31, 2012
was 2,984 million.

Net sales

Domestic ad sales were Ps.3,402 million in the period, compared to Ps.3,525 million from the same period of the previous year. Sales were complemented by revenue from Azteca America—the company's wholly-owned broadcast television network focused on the U.S. Hispanic market—of Ps.190 million, compared to Ps.271 million a year ago.

Programming sales to other countries were Ps.35 million in the period, from Ps.78 million from the previous year. The revenue resulted from the export of programs such as Los Rey and Amor Cautivo to Central America, as well as La Tenienteto South America, and Asia.

Costs and expenses

Costs and expenses decreased 3% during the period, as the result of a 5% reduction in production, programming and transmission costs —to Ps.1,611 million, from Ps.1,696 million in the same period a year ago— and a 3% increase in selling and administrative expenses —to Ps.408 million, from Ps.396 million in the same quarter of 2011.

The reduction in costs results from higher 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 the growth in advisory fees and service payments.

EBITDA and net income

EBITDA was Ps.1,608 million, compared to Ps.1,782 million in the same period of last year. The most significant change below EBITDA was a Ps.180 million decrease in comprehensive financial cost, mainly related to lower interest related expenses this period.

Net income for the quarter was Ps.1,111 million, from Ps.1,263 million last year.

Debt

As of December 31, 2012, Azteca's outstanding debt —excluding Ps.1,558 million debt due in 2069—was Ps.9,039 million, 9% bellow the Ps.9,993 million from the previous year.

The cash balance of the company was Ps.7,271 million, compared to Ps.8,318 million a year ago. As a result, net debt was Ps.1,768 million, from Ps.1,675 million from the prior year. Debt to last twelve months (LTM) EBITDA ratio was 2 times, and net debt to LTM EBITDA was 0.4 times.

Fiber optic network

Azteca successfully concluded the installation of fiber optics in 226 municipalities in Colombia during the quarter, from a total of 753 municipalities in which it will deploy a network of 19,000 kilometers in a two and a half year period.

As previously announced, Azteca is building the largest network in Latin America, which will cover close to 80% of Colombian territory, and will commercialize telecommunications services in the country. For its installation, the government of Colombia will provide close to US$235 million. The commercialization of the services will result in the diversification and strengthening of Azteca's results, by adding its operation to the solid performance of its broadcast television business.

Twelve months results

Net sales in the year were Ps.12,570 million, 3% above the Ps.12,199 million in 2011. Total costs and expenses were Ps.8,087 million, from Ps.7,522 million for last year. The increase in costs results from the exhibition rights and production costs related to the London 2012 Olympic Games, as well as the production of competitive content.

Azteca reported EBITDA of Ps.4,483 million, compared to Ps.4,677 million from the prior year; the EBITDA margin for 2012 was 36%. The company recorded net income of Ps.2,307 million, 5% above the Ps.2,199 million from 2011, mainly due to an exchange gain in the year, compared to exchange loss in 2011.

2011 2012 Change
Ps. %
Net sales $12,199 $12,570 $371 3%
EBITDA $4,677 $4,483 $(194) -4%
Net income $2,199 $2,307 $109 5%
Net income per CPO $0.74 $0.77 $0.03 5%
Figures in millions of pesos.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
The number of CPOs outstanding as of December 31, 2011 was 2,985 million and as of December 31, 2012 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 a 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 2011 and 2012)
Fourth Quarter of:
2011 2012
Change
Net revenue Ps 3,874 100% Ps 3,627 100% Ps (247) -6%
Programming, production and transmission costs 1,696 44% 1,611 44% (85) -5%
Selling and administrative expenses 396 10% 408 11% 12 3%
Total costs and expenses 2,092 54% 2,019 56% (73) -3%
EBITDA 1,782 46% 1,608 44% (174) -10%
Depreciation and amortization 141 144 3
Other expense -Net 42 123 81
Operating profit 1,599 41% 1,341 37% (258) -16%
Equity in income from affiliates 56 29 (27)
Comprehensive financing result:
Interest expense (292) (189) 102
Other financing expense (19) (10) 10
Interest income 39 51 12
Exchange loss -Net (107) (52) 55
(379) (199) 180
Income before the following provision 1,277 33% 1,171 32% (105) -8%
Provision for income tax (31) (58) (27)
Net income Ps 1,245 Ps 1,113 Ps (132)
Non-controlling share in net profit Ps (17) Ps 2 Ps 20
Controlling share in net profit Ps 1,263 33% Ps 1,111 31% Ps (152) -12%
TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Millions of Mexican pesos of December 31 of 2011 and 2012)
Period ended December 31,
2011 2012
Change
Net revenue Ps 12,199 100% Ps 12,570 100% Ps 371 3%
Programming, production and transmission costs 6,056 50% 6,577 52% 521 9%
Selling and administrative expenses 1,467 12% 1,510 12% 44 3%
Total costs and expenses 7,522 62% 8,087 64% 565 8%
EBITDA 4,677 38% 4,483 36% (194) -4%
Depreciation and amortization 509 556 47
Other expense -Net 289 331 42
Operating profit 3,879 32% 3,595 29% (283) -7%
Equity in income from affiliates 57 36 (21)
Comprehensive financing result:
Interest expense (931) (922) 9
Other financing expense (97) (148) (52)
Interest income 149 223 73
Exchange Gain -Net (328) 132 460
(1,206) (715) 491
Income before the following provision 2,730 22% 2,916 23% 186 7%
Provision for income tax (548) (619) (71)
Net income Ps 2,182 Ps 2,297 Ps 116
Non-controlling share in net profit Ps (17) Ps (10) Ps 7
Controlling share in net profit Ps 2,199 18% Ps 2,307 18% Ps 109 5%
TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Mexican pesos of December 31 of 2011 and 2012)
At December 31
2011 2012
Change
Current assets:
Cash and cash equivalents Ps 8,318 Ps 7,271 Ps (1,047)
Accounts receivable 7,751 5,894 (1,857)
Other current assets 1,875 2,110 235
Total current assets 17,944 15,275 (2,669) -15%
Exhibition rights 1,328 1,505 177
Property, plant and equipment-Net 3,339 3,465 126
Television concessions-Net 7,721 7,565 (156)
Other assets 1,021 1,481 460
Goodwill -Net -- -- --
Deferred income tax asset 4,286 4,286 --
Total long term assets 17,695 18,302 607 3%
Total assets Ps 35,639 Ps 33,577 Ps (2,062) -6%
Current liabilities:
Short-term debt Ps 667 Ps 667 Ps --
Other current liabilities 2,561 2,493 (68)
Total current liabilities 3,228 3,160 (68) -2%
Long-term debt:
Structured Securities Certificates 5,210 4,547 (663)
Long-term debt 4,116 3,825 (291)
Total long-term debt 9,326 8,372 (954)
Other long term liabilities:
Advertising advances 7,532 5,419 (2,113)
American Tower Corporation (due 2069) 1,674 1,558 (116)
Deferred income tax asset 3,106 3,112 6
Total other long-term liabilities 12,312 10,089 (2,223) -18%
Total liabilities 24,866 21,621 (3,245) -13%
Total stockholders' equity 10,773 11,956 1,183 11%
Total liabilities and equity Ps 35,639 Ps 33,577 Ps (2,062) -6%

CONTACT: Investor Relations: Bruno Rangel + 52 (55) 1720 9167 jrangelk@tvazteca.com.mx Carlos Casillas + 52 (55) 1720 9167 cjcasillas@tvazteca.com.mx Press Relations: Jaime Ramos + 52 (55) 1720 1416 jramosr@tvazteca.com.mx Daniel McCosh + 52 (55) 1720 0059 dmccosh@tvazteca.com.mxSource:TV Azteca, SAB de CV