Report predicts less advertising in the Mexican market, which would affect TV Azteca sales
TV Azteca’s sales in 2013 are projected to see a slight increase of 0.1%, in addition to pre-tax earnings, write-offs and depreciation (Ebitda) of 0% due to weak growth (0.2%) in advertising sales as a result of the industry’s complex environment, says Monex Grupo Financiero.
The TV network’s operating margins and EBITDA will stay unchanged at 32.4% and 36.8%, respectively, as a result of higher costs and sales expenses compared to the company’s total revenues.
Valeria Romo, securities analyst for telecommunications and airports at Monex, notes in a press release that TV Azteca is Mexico’s second-largest television company, with a 32% market share.
The company operates three television channels aimed at different segments of the population: Azteca 7 targets middle and upper-class young people, Azteca 13 is directed at the whole family, and Proyecto 40 targets viewers interested in news and culture.
"Azteca’s strategy in the Mexican market centers on a multi-functional format that uses content production to generate value relationships with viewers and a win-win relationship with companies that place ads on its channels," says Romo.
Romo believes that Azteca’s value proposition is directed toward generating virtuous relationships between viewers and content, in order to provide advertisers with attractive and therefore more profitable ad space.
According to the report, the company has about 400 national advertisers and over 6,000 local ones, with its 10 largest advertisers representing 24% of the company’s total sales.