Panregional: Televisa and Prisa results: Increasing Revenues and Flat Profits in 2008

Results of the two largest media companies in the Spanish-speaking world.

  • Mexican Multimedia Company Grupo Televisa posted a nearly flat fourth-quarter net profit despite a rise in revenues.

Grupo Televisa (earned 2.84 billion pesos ($206 million) in the October-December period compared with 2.83 billion pesos in the same quarter of the previous year, according to a filing with the Mexican stock exchange.

Results exceeded analysts' expectations of a 2.523 billion peso quarterly profit.

Quarterly revenue rose 17 percent, far above analysts' expectations, to 14.5 billion pesos.

Televisa is the world's largest producer of Spanish-language television content. It expects broadcasting sales to remain flat in 2009 because of the country's deteriorating economy,

In the current economic environment, "we believe that maintaining the same level of broadcasting sales as we achieved in 2008 would be remarkable," said Alfonso de Angoitia, the executive vice president of administration and finance. De Angoitia called those results "a very good starting point" for 2009.

Televisa´s costs rose last year in large part because of the sharp peso depreciation. The company's dollar-denominated expenditures include movies, sports rights, satellite and other programming. But De Angoitia said Televisa's foreign-exchange exposure is limited. The company expects dollar-denominated sales of 600 million in 2009 and dollar-denominated expenses of 750 million.

"We are approaching this challenging economic environment in an enviable position of strength," he said during a conference call with analysts.

De Angoitia said Televisa was cutting costs to cope with difficult times. It has implemented a hiring freeze and will not give salary increases for middle and top managers in 2009.

  • Spain's leading media group, Prisa, 80% owner of Grupo Latino de Radio, reported 83 million euros ($105 million) in net profit for 2008, a 56.8% drop from the previous year, despite an 8.3% growth in revenue and a modest 4.9% dip in advertising revenue.

    Prisa posted 1 billion euros ($1.2 billion) in ad revenue, 27% of the group's total sales of 4 billion euros ($5 billion). An additional 1 billion euros ($1.2 billion) came from subscribers to its products.

    The group -- which owns Spain's widest circulating daily, El Pais, and textbook publisher Santillana and the main pay TV platform Digital Plus as well as free-to-air channel Cuatro -- said it was able to weather the advertising investment crisis plaguing the industry better than other media thanks to its "diversification of clients the Group counts on, as well as its positioning in national, local and international advertising."

    Sogecable, the group's film and TV branch, hit a record 1.87 billion euros ($2.3 billion) in revenue for 2008, with its Cuatro bolstering ad revenue 13.7% to 292 million euros ($397 million) and snagging 8.6% of the audience three years after its launch. Digital Plus, which boasts more than 2 million subscribers, saw its ad sales drop 8.1% to 26.2 million euros ($33.2 million).

    The group's Internet business Prisacom continued its growth, with 19.35 million euros ($24.6 million) in revenues, a 22.4% jump over 2007.

In the past year, Prisa announced it did not have to sell Digital Plus in order to pay a 2 billion euro ($2.5 billion) debt due in March after it received bank support for the repayment. Talks between Prisa and potential buyers Vivendi and Telefonica reportedly stalled after failing to agree on a price.

Prisa has said selling Digital Plus is part of a broad cost-cutting strategy.
 

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