Grupo Televisa SA, the Spanish-language broadcaster, said fourth-quarter profit dropped 58 percent as spending on pay-TV programming increased.

Net income fell to 1.19 billion pesos ($92.8 million) from 2.84 billion pesos a year earlier, Mexico City-based Televisa said yesterday in a statement. The company said profit was also hurt by currency fluctuations and accounting expenses. Sales rose 4.8 percent to 15.2 billion pesos.

Televisa is spending to start up sports and news channels on Latin American cable and satellite systems as growth slows in its broadcast business. The company is also paying for the right to broadcast all of this year’s World Cup soccer games on its Sky Mexico satellite network.

Televisa fell 1.21 pesos to 48.26 pesos yesterday in Mexico City trading. The shares have dropped 11 percent this year.

The profit margin in five of Televisa’s six divisions narrowed from a year earlier, the company said. The only business to increase its margin was programming exports.

Operating profit for the pay-TV network division fell 6.2 percent to 403 million pesos from a year earlier as the company started the Televisa Sports Network, a new cable and satellite channel.

Total operating profit, which excludes items such as currency movements, dropped 9.7 percent to 4.3 billion pesos. Net income included a loss of 393 million pesos from currency fluctuations, compared with a gain of 1.13 billion pesos a year earlier.

Expenses for other accounting items included in net income, such as costs to account for declines in the value of assets, more than quadrupled to 1.41 billion pesos.

The three cable carriers controlled by Televisa added a total of 49,000 Internet subscribers to reach 652,000 clients. Phone customers rose by 62,000 to 356,000. The company’s Sky satellite service recruited 143,000 subscribers.

Source: Boomberg

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