GMA NETWORK, Inc. suffered a 71.5% decline in net income attributable to shareholders to P603.57 million in the first quarter from P2.12 billion a year ago when political advertisements abound.
“The absence this year of almost P1.5-billion worth of political advocacies and advertisements in the first quarter of 2022 factored considerably into the company’s top-line reduction,” GMA said in a statement.
The profit cut came about after the company booked 31.5% lower revenues to P4.02 billion in the first three months of 2023, from P5.86 billion in 2022.
Revenues from advertisements went down to P3.7 billion in the first quarter, down 71.5% from P5.53 billion in 2022.
“Advertising revenues remained the lifeblood of GMA, comprising more than 90% of the total revenue pie,” the company said.
“It was also the biggest source of the drag, with a contraction of P1.83 billion, mainly due to the absence of incremental sales from last year’s elections placements,” it added.
Despite the 12.3% drop in the sales of its services to P210.42 million during the quarter from P240.55 million a year ago, the company said its operations returned to the pre-pandemic level.
“Despite lukewarm sales performance during the quarter, operations have returned to pre-pandemic levels, with costs also rising due to more fresh episodes produced as well as the resumption of face-to-face activities,” GMA said.
Meanwhile, the company’s total operating expenses during the period went up by 6% to 3.26 billion from P3.08 billion in 2022.
GMA said that it recorded an increase in production, other direct, general, and administrative costs in the first quarter, as well as an increase in the cost of goods.
“Management has made a concerted effort to keep spending at bay given the economic challenges, nonetheless ensuring that commitment of the company to its viewers and stakeholders are at the forefront,” it said.
GMA is primarily involved in the business of radio and television broadcasting. It also produces films and other information-related businesses.
In 2023, the company earmarked around P1.78 billion for capital expenditure, which will be funded internally.
On Tuesday, shares in GMA declined by 31 centavos or 3.02% to P9.95 each. — Justine Irish D. Tabile