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Azteca Announces Sales of Ps.2,820 Million and EBITDA Of Ps.847 Million for the Second Quarter of 2013

MEXICO CITY, July 18, 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 second quarter and first half of 2013.

Second quarter results

Net sales for the quarter were Ps.2,820 million, from Ps. 2,994 million for the same quarter of 2012. The decrease in sales continues to be caused largely by the change in government that redefines communication projects; the company expects such projects to recover during the second half of 2013.

Total costs and expenses were Ps.1,973 million, 3% below Ps.2,028 million the same period of the previous year. As a result, Azteca reported EBITDA of Ps.847 million, compared to Ps.966 million from last year; EBITDA margin for the quarter was 30%.

The company registered a net loss of Ps.85 million, compared to net income of Ps.40 million for the same quarter of 2012.

2Q 2012 2Q 2013 Change
Ps. %
Net sales $ 2,994 $ 2,820 $ (174) -6%
EBITDA $ 966 $ 847 $ (119) -12%
Net result $ 40 $ (85) $ (125) ---
Net result per CPO $ 0.01 $ (0.03) $ (0.04) ---
Figures in millions of pesos.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
The number of CPOs outstanding as of June 30, 2012 was 2,985 million and as of June 30, 2013 was 2,984 million.

Net sales

Domestic ad sales were Ps.2,601 million in the period, compared to Ps.2,706 million for the same period of the previous year.

Additionally, the company registered sales from Azteca America—the company's wholly-owned broadcast television network focused on the U.S. Hispanic market—of Ps.173 million, compared to Ps.229 million a year ago.

Content sales to other countries were Ps.46 million in the period, from Ps.59 million in the previous year; revenue for the quarter resulted from the exports of programs such as Vivir a Destiempo in Central and South America, Destino in Europe and Asia, and La Otra Cara del Alma in Europe, Asia and Central America.

Costs and expenses

Costs and expenses decreased 3% during the period, as a result of a 3% reduction in production, programming and transmission costs—to Ps.1,599 million from Ps.1,650 million in the same period a year ago—and a 1% decrease in selling and administrative expenses—to Ps.374 million, compared to Ps.379 million in the same quarter of 2012.

The reduction in costs results from growing 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 lesser operations and travelling expenses in the period.

EBITDA and net result

EBITDA was Ps.847 million, compared to Ps.966 million in the same period of last year; the most significant change below EBITDA was a Ps.44 million improvement in the comprehensive financing result, derived from a reduction in other financing expenses.

Net loss for the quarter was Ps.85 million, from a net income of Ps.40 million last year.

Debt

As of June 30, 2013, Azteca´s outstanding debt—excluding Ps.1,560 million debt due in 2069—was Ps.8,781 million, 9% below the Ps.9,621 million from the previous year.

The cash balance of the company was Ps.6,877 million, compared to Ps.7,764 million a year ago. As a result, net debt was Ps.1,904 million, from Ps.1,857 million from the prior year. Debt to last twelve months (LTM) EBITDA ratio was 2.1 times, and net debt to LTM EBITDA was 0.5 times.

Fiber optic network

At the end of the quarter, Azteca installed 12,000 kilometers of fiber optic cable in Colombia, as part of a telecommunications project that will include a 19,000 kilometer network. Current coverage includes 452 municipalities, with the final goal of 753 where the network will be deployed.

As previously announced, Azteca is building in Colombia the largest fiber optic network in Latin America. The network represents a significant increase in the telecommunications service infrastructure; according to estimates by the Colombian government, the number of municipalities covered with fiber optic will increase from 27% to 96%, which facilitates the development of Colombia.

The commercialization of telecommunications services will diversify and strengthen Azteca revenue sources, adding to existing solid results in the media business. The Colombian government is contributing about US$235 million for the network construction.

Six months results

Net sales in the semester were Ps.5,236 million, compared to the Ps.5,745 million of the previous year. Total costs and expenses were Ps.3,776 million, 4% below the Ps.3,929 million for the same period of 2012, derived mainly from strict budgeting and effective control in disbursements for content production.

Azteca reported EBITDA of Ps.1,460 million, compared to Ps.1,816 million from the prior year; EBITDA margin was 28% for the period. The company recorded net income of Ps.67 million, compared to Ps.478 million for the same period of 2012.

6M 2012 6M 2013 Change
Ps. %
Net sales $ 5,745 $ 5,236 $ (508) -9%
EBITDA $ 1,816 $ 1,460 $ (356) -20%
Net income $ 478 $ 67 $ (411) -86%
Net income per CPO $ 0.16 $ 0.02 $ (0.14) -86%
Figures in millions of pesos.
EBITDA: Operating Profit Before Depreciation and Amortization.
The number of CPOs outstanding as of June 30, 2012 was 2,985 million and as of June 30, 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 June 31 of 2012 and 2013 )
Second Quarter of :
2012 2013
Change
Net revenue Ps 2,994 100% Ps 2,820 100% Ps (174) -6%
Programming, production and transmission costs 1,650 55% 1,599 57% (50) -3%
Selling and administrative expenses 379 13% 374 13% (5) -1%
Total costs and expenses 2,028 68% 1,973 70% (55) -3%
EBITDA 966 32% 847 30% (119) -12%
Depreciation and amortization 140 144 3
Other expense -Net 94 150 56
Operating profit 732 24% 553 20% (179) -24%
Equity in income from affiliates (13) 1 14
Comprehensive financing result:
Interest expense (245) (224) 21
Other financing expense (109) (49) 61
Interest income 66 45 (21)
Exchange loss -Net (210) (227) (18)
(499) (455) 44
Income before the following provision 221 7% 99 4% (121) -55%
Provision for income tax (184) (188) (4)
Net income Ps 37 Ps (89) Ps (125)
Non-controlling share in net profit Ps (4) Ps (4) Ps 0
Controlling share in net profit Ps 40 1% Ps (85) -3% Ps (125) -311%
TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Millions of Mexican pesos of June 31 of 2012 and 2013 )
Period ended June 30,
2012 2013
Change
Net revenue Ps 5,745 100% Ps 5,236 100% Ps (508) -9%
Programming, production and transmission costs 3,205 56% 3,022 58% (183) -6%
Selling and administrative expenses 724 13% 754 14% 30 4%
Total costs and expenses 3,929 68% 3,776 72% (153) -4%
EBITDA 1,816 32% 1,460 28% (356) -20%
Depreciation and amortization 270 292 23
Other expense -Net 152 209 57
Operating profit 1,395 24% 959 18% (436) -31%
Equity in income from affiliates 1 (9) (9)
Comprehensive financing result:
Interest expense (489) (464) 24
Other financing expense (122) (60) 62
Interest income 120 87 (33)
Exchange loss -Net (9) (20) (12)
(500) (459) 41
Income before the following provision 895 16% 491 9% (404) -45%
Provision for income tax (425) (432) (7)
Net income Ps 471 Ps 59 Ps (411)
Non-controlling share in net profit Ps (7) Ps (7) Ps (0)
Controlling share in net profit Ps 478 8% Ps 67 1% Ps (411) -86%
TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Mexican pesos of June 30 of 2012 and 2013)
At June 30
2012 2013
Change
Current assets:
Cash and cash equivalents Ps 7,764 Ps 6,877 Ps (887)
Accounts receivable 7,270 6,347 (923)
Other current assets 2,381 2,660 279
Total current assets 17,415 15,884 (1,531) -9%
Exhibition rights 1,367 1,792 425
Property, plant and equipment-Net 3,480 3,411 (69)
Television concessions-Net 7,721 7,721 --
Other assets 1,280 1,885 605
Deferred income tax asset 4,286 4,672 386
Total long term assets 18,134 19,481 1,347 7%
Total assets Ps 35,549 Ps 35,365 Ps (184) -1%
Current liabilities:
Short-term debt Ps 667 Ps 667 Ps --
Other current liabilities 2,672 2,639 (33)
Total current liabilities 3,339 3,306 (33) -1%
Long-term debt:
Structured Securities Certificates 4,944 4,278 (666)
Long-term debt 4,010 3,836 (174)
Total long-term debt 8,954 8,114 (840)
Other long term liabilities:
Advertising advances 7,664 6,951 (713)
American Tower Corporation (due 2069) 1,635 1,560 (75)
Deferred income tax asset 3,106 3,463 357
Total other long-term liabilities 12,405 11,974 (431) -3%
Total liabilities 24,698 23,394 (1,304) -5%
Total stockholders' equity 10,851 11,971 1,120 10%
Total liabilities and equity Ps 35,549 Ps 35,365 Ps (184) -1%

CONTACT: Investor Relations: Bruno Rangel + 52 (55) 1720 9167 jrangelk@tvazteca.com.mx Carlos Casillas +52 (55) 17 20 91 67 cjcasillas@tvazteca.com.mx Press Relations: Jaime Ramos +52 (55) 17 20 14 16 jramosr@tvazteca.com.mx Daniel McCosh +52 (55) 17 20 00 59 dmccosh@tvazteca.com.mxSource:TV Azteca, SAB de CV

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