— Solid progress in the construction of Red Dorsal Nacional de Perú,
with 4,676 kilometers deployed—
—The company has operations in Colombia that have associated costs,
but will generate solid yields in the future—
MEXICO CITY, Oct. 27, 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 third quarter and for the first nine months of 2015.
Third quarter results
Net sales for the quarter were Ps.3,185 million compared to Ps.3,277 million for the same quarter of last year. Total costs and expenses were Ps.2,659 million, from Ps.2,245 million for the same period last year.
As a result, TV Azteca reported EBITDA of Ps.525 million, compared to Ps.1,032 million from last year; EBITDA margin for the quarter was 16%. The company registered a net loss of Ps.817 million, compared to a net profit of Ps.11 million for the same quarter of 2014.
| 3Q 2014 | 3Q 2015 | Change | ||||||||||
| Ps. | % | |||||||||||
| Net sales | $ | 3,277 | $ | 3,185 | $ | (93 | ) | -3 | % | |||
| EBITDA | $ | 1,032 | $ | 525 | $ | (507 | ) | -49 | % | |||
| Net result | $ | 11 | $ | (817 | ) | $ | (828 | ) | -- | |||
| Net result per CPO | $ | 0.004 | $ | (0.27 | ) | $ | (0.27 | ) | -- | |||
Figures in millions of pesos.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
The number of CPOs outstanding as of September 30, 2014 was 2,988 million and as of September 30, 2015 was 2,983 million.
Net sales
Domestic ad sales were Ps.2,731 million, compared to Ps.2,908 million from the previous year. The reduction results mainly from extraordinary revenues a year ago related to the World Cup soccer tournament in Brazil.
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.307 million this quarter, a 26% increase compared to Ps.243 million a year ago.
Content sales to other countries were Ps.51 million in the quarter, from Ps.91 million from the previous year. The revenue was directly related to the export of programs Tanto Amor, Soy tu Doble and La Isla in Central and South America, as well as from the sale of TV Azteca’s pay TV channels to the rest of the world.
Revenues from Azteca Guatemala and Azteca Honduras were Ps.15 million, compared to Ps.12 million from the previous year.
Sales from Azteca Comunicaciones Colombia –derived from telecommunications revenues through the fiber-optic network operating in that country– were Ps.81 million, from Ps.23 million a year ago.
Costs and expenses
Costs and expenses increased 18% as a result of an 23% growth in production, programming, transmission and telecommunication service costs —to Ps.2,258 million, from Ps.1,835 million in the same period a year ago— partially compensated by a 2% reduction in selling and administrative expenses —to Ps.402 million, compared to Ps.410 million for the same quarter of 2014.
The increase in costs in the period largely reflects the effect of the depreciation in the exhibition rights acquired from third-party content —US dollar-denominated— as well as the telecommunications operations of the company in Colombia.
Costs related to the operations in Colombia were Ps.140 million in the quarter, compared to Ps.55 million for the previous year. Those costs —which reflect the natural growth stage of a new business— include paid rents for transmitting towers and spaces to operate telecommunications nodes, as well as maintenance and operation of the network. The company expects the Colombian operations, as well as the operations that are starting in Perú, to generate solid yields in the future.
The reduction in selling and administrative expenses reflect lesser expenses in operation, advisory fees and services this quarter as a result of strategies that strengthen the operative efficiency of the company.
EBITDA and net result
EBITDA was Ps.525 million, in comparison to Ps.1,032 million for the same period of the prior year.
The most significant change below EBITDA was a Ps.244 million increase in the comprehensive financing cost, mainly derived from a foreign exchange loss for the period compared to the same quarter a year ago.
The company registered a net loss of Ps.817 million for the quarter, compared to a net gain of Ps.11 million for the same period a year ago.
Debt
During the quarter, the company paid US$75 million of its short term debt. As of September 30, 2015, TV Azteca’s outstanding debt —excluding Ps.1,551 million debt due in 2069—was Ps.13,345 million.
The cash and cash equivalents balance at the end of the quarter was Ps.3,625 million; as a result, net debt was Ps.9,720 million at the end of the period.
Fiber-optic network in Peru
At the end of quarter, Azteca Comunicaciones Peru —a subsidiary of TV Azteca— had installed 4,676 kilometers of fiber optics, of a total of 13,400 kilometers that will be deployed in the Red Dorsal Nacional de Fibra Óptica of the country.
As previously announced, in December 2013 TV Azteca won a tender to construct and operate a fiber-optic network that will offer telecommunications services in approximately 80% of Peruvian territory. Construction of the network started last December, and has an estimated time of 18 months. TV Azteca will commercialize the telecommunications services in 339 communities, through a 20-year concession.
TV Azteca offers world-class telecommunications, effectively driving the wellbeing of the population and productivity in business. The company also successfully built and operates the largest fiber optic network in Latin America, in Colombia.
Nine month results
Net sales for the first nine months of 2015 were Ps.8,712 million, 4% lower than the Ps.9,071 million for the same period of 2014. Total costs and expenses were Ps.7,399 million, from Ps.6,599 million for the same period of the previous year. Higher costs resulted from the depreciation effect in US dollar-denominated exhibition rights and from the start of the operating stage of Azteca Comunicaciones Colombia.
TV Azteca reported EBITDA of Ps.1,313 million, compared to Ps.2,472 million from the first nine months a year ago; EBITDA margin was 15% for the ninth-month period. The company recorded a net loss of Ps.2,122 million, compared to net profit of Ps.109 million for the same period of 2014.
| 9M 2014 | 9M 2015 | Change | ||||||||||
| Ps. | % | |||||||||||
| Net sales | $ | 9,071 | $ | 8,712 | $ | (359 | ) | -4 | % | |||
| EBITDA | $ | 2,472 | $ | 1,313 | $ | (1,159 | ) | -47 | % | |||
| Net result | $ | 109 | $ | (2,122 | ) | $ | (2,232 | ) | -- | |||
| Net result per CPO | $ | 0.04 | $ | (0.71 | ) | $ | (0.75 | ) | -- | |||
Figures in millions of pesos.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
The number of CPOs outstanding as of September 30, 2014 was 2,988 million and as of September 30, 2015 was 2,983 million.
Company Profile
TV Azteca is one of the two largest producers of Spanish-language television programming in the world, operating two national television networks in Mexico, El trece and Azteca 7, through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America, a broadcast television network focused on the rapidly growing U.S. Hispanic market, and Azteca Web, an Internet company for North American Spanish speakers.
TV 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: TV 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 September 30 of 2014 and 2015 ) | ||||||||||||||||||||||
| Third Quarter of : | ||||||||||||||||||||||
| 2014 | 2015 | |||||||||||||||||||||
| Change | ||||||||||||||||||||||
| Net revenue | Ps | 3,277 | 100 | % | Ps | 3,185 | 100 | % | Ps | (93 | ) | -3 | % | |||||||||
| Programming, production and transmission costs | 1,835 | 56 | % | 2,258 | 71 | % | 423 | 23 | % | |||||||||||||
| Selling and administrative expenses | 410 | 13 | % | 402 | 13 | % | (9 | ) | -2 | % | ||||||||||||
| Total costs and expenses | 2,245 | 69 | % | 2,659 | 84 | % | 414 | 18 | % | |||||||||||||
| EBITDA | 1,032 | 31 | % | 525 | 16 | % | (507 | ) | -49 | % | ||||||||||||
| Depreciation and amortization | 173 | 196 | 23 | |||||||||||||||||||
| Other expense -Net | 104 | 124 | 20 | |||||||||||||||||||
| Operating profit | 755 | 23 | % | 206 | 6 | % | (549 | ) | -73 | % | ||||||||||||
| Equity in income from affiliates | 8 | (23 | ) | (31 | ) | |||||||||||||||||
| Comprehensive financing result: | ||||||||||||||||||||||
| Interest expense | (253 | ) | (325 | ) | (72 | ) | ||||||||||||||||
| Other financing expense | (29 | ) | (18 | ) | 11 | |||||||||||||||||
| Interest income | 21 | 24 | 3 | |||||||||||||||||||
| Exchange loss -Net | (351 | ) | (537 | ) | (186 | ) | ||||||||||||||||
| (612 | ) | (856 | ) | (244 | ) | |||||||||||||||||
| Income before the following provision | 151 | 5 | % | (673 | ) | -21 | % | (825 | ) | |||||||||||||
| Provision for income tax | (145 | ) | (150 | ) | (5 | ) | ||||||||||||||||
| Net income | Ps | 6 | Ps | (823 | ) | Ps | (829 | ) | ||||||||||||||
| Non-controlling share in net profit | Ps | (4 | ) | Ps | (6 | ) | Ps | (2 | ) | |||||||||||||
| Controlling share in net profit | Ps | 11 | 0 | % | Ps | (817 | ) | -26 | % | Ps | (827 | ) | ||||||||||
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | |||||||||||||||||||||
| CONSOLIDATED RESULTS OF OPERATIONS | |||||||||||||||||||||
| (Millions of Mexican pesos of September 30 of 2014 and 2015 ) | |||||||||||||||||||||
| Period ended September 30, | |||||||||||||||||||||
| 2014 | 2015 | ||||||||||||||||||||
| Change | |||||||||||||||||||||
| Net revenue | Ps | 9,071 | 100 | % | Ps | 8,712 | 100 | % | Ps | (359 | ) | -4 | % | ||||||||
| Programming, production and transmission costs | 5,404 | 60 | % | 6,210 | 71 | % | 806 | 15 | % | ||||||||||||
| Selling and administrative expenses | 1,195 | 13 | % | 1,189 | 14 | % | (6 | ) | -1 | % | |||||||||||
| Total costs and expenses | 6,599 | 73 | % | 7,399 | 85 | % | 800 | 12 | % | ||||||||||||
| EBITDA | 2,472 | 27 | % | 1,313 | 15 | % | (1,159 | ) | -47 | % | |||||||||||
| Depreciation and amortization | 521 | 543 | 23 | ||||||||||||||||||
| Other expense -Net | 275 | 368 | 93 | ||||||||||||||||||
| Operating profit | 1,676 | 18 | % | 401 | 5 | % | (1,274 | ) | -76 | % | |||||||||||
| Equity in income from affiliates | 17 | (9 | ) | (26 | ) | ||||||||||||||||
| Comprehensive financing result: | |||||||||||||||||||||
| Interest expense | (750 | ) | (928 | ) | (178 | ) | |||||||||||||||
| Other financing expense | (67 | ) | (55 | ) | 12 | ||||||||||||||||
| Interest income | 103 | 87 | (16 | ) | |||||||||||||||||
| Exchange Gain -Net | (297 | ) | (1,016 | ) | (719 | ) | |||||||||||||||
| (1,011 | ) | (1,912 | ) | (901 | ) | ||||||||||||||||
| Income before the following provision | 682 | 8 | % | (1,520 | ) | -17 | % | (2,202 | ) | ||||||||||||
| Provision for income tax | (584 | ) | (619 | ) | (35 | ) | |||||||||||||||
| Net income | Ps | 97 | Ps | (2,139 | ) | Ps | (2,237 | ) | |||||||||||||
| Non-controlling share in net profit | Ps | (12 | ) | Ps | (17 | ) | Ps | (5 | ) | ||||||||||||
| Controlling share in net profit | Ps | 109 | 1 | % | Ps | (2,122 | ) | -24 | % | Ps | (2,232 | ) | |||||||||
| TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES | |||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||
| (Millions of Mexican pesos of September 30 of 2014 and 2015) | |||||||||||||
| At September 30 | |||||||||||||
| 2014 | 2015 | ||||||||||||
| Change | |||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | Ps | 5,522 | Ps | 3,625 | Ps | (1,897 | ) | ||||||
| Accounts receivable | 6,222 | 6,829 | 607 | ||||||||||
| Other current assets | 2,863 | 4,093 | 1,230 | ||||||||||
| Total current assets | 14,607 | 14,547 | (60 | ) | 0 | % | |||||||
| Accounts receivable | 194 | 298 | 104 | ||||||||||
| Exhibition rights | 2,619 | 2,577 | (42 | ) | |||||||||
| Property, plant and equipment-Net | 3,544 | 4,196 | 652 | ||||||||||
| Television concessions-Net | 7,763 | 9,847 | 2,084 | ||||||||||
| Other assets | 4,385 | 3,439 | (946 | ) | |||||||||
| Deferred income tax asset | 3,128 | 2,680 | (448 | ) | |||||||||
| Total long term assets | 21,633 | 23,037 | 1,404 | 6 | % | ||||||||
| Total assets | Ps | 36,240 | Ps | 37,584 | Ps | 1,344 | 4 | % | |||||
| Current liabilities: | |||||||||||||
| Short-term debt | Ps | 1,007 | Ps | - | Ps | (1,007 | ) | ||||||
| Other current liabilities | 4,121 | 5,618 | 1,497 | ||||||||||
| Total current liabilities | 5,128 | 5,618 | 490 | 10 | % | ||||||||
| Long-term debt: | |||||||||||||
| Long-term debt | 10,524 | 13,345 | 2,821 | ||||||||||
| Total long-term debt | 10,524 | 13,345 | 2,821 | ||||||||||
| Other long term liabilities: | |||||||||||||
| Advertising advances | 5,392 | 6,532 | 1,140 | ||||||||||
| American Tower Corporation (due 2069) | 1,233 | 1,551 | 318 | ||||||||||
| Deferred income tax | 1,728 | 910 | (818 | ) | |||||||||
| Total other long-term liabilities | 8,353 | 8,993 | 640 | 8 | % | ||||||||
| Total liabilities | 24,005 | 27,956 | 3,951 | 16 | % | ||||||||
| Total stockholders' equity | 12,235 | 9,628 | (2,607 | ) | -21 | % | |||||||
| Total liabilities and equity | Ps | 36,240 | Ps | 37,584 | Ps | 1,344 | 4 | % | |||||
| 0 | - | ||||||||||||