Azteca Announces 3Q EBITDA Growth of 17% to Historical Maximum of Ps.1,287 Million

MEXICO CITY, Oct. 27, 2011 /PRNewswire/ -- 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 of 2011.

"We achieved outstanding sales in the context of superior audience share levels, that generated growing demand for advertising in Mexico and the United States, as well as strong interest for our content in the rest of the world during this period," commented Mario San Roman, CEO of Azteca. "The higher income in conjunction with operational  efficiency, resulted in the solid growth of the EBITDA to historical maximums for a third quarter and a three percentage point expansion in EBITDA margin, to 42%."

Third quarter results

Net sales were Ps.3,030 million, 8% above of Ps.2,806 million for the same quarter of 2010.  Total costs and expenses were Ps.1,743 million, from  Ps.1,705 million in the same period of the previous year.  

As a result, Azteca reported EBITDA of Ps.1,287 million, 17% more than the Ps.1,101 million in the third quarter of 2010 and a historical maximum for a third quarter.  The EBITDA margin was 42%, three percentage points higher than last year.  The company registered net income of Ps.380 million, compared to Ps.416 million from the previous year.

Net sales

"The solid programming grids generated an audience share growth in Mexico to 42% for the full day during this quarter, which translated to an additional interest for the development of successful advertising campaigns on our screens," added Mr. San Roman. "This was crucial for the success in superior sales in the period, despite the tough comparison against the revenue related to the final phase of the Soccer World Cup a year ago."

The increase in sales was complemented by revenue from Azteca America—the company's wholly-owned broadcast television network focused on the U.S. Hispanic market—of Ps.258 million, 17% above the Ps.220 million a year ago, with a growing preference of advertisers to reach their target segments through the network's programming.

Programming sales to other countries were Ps.89 million in the period, from Ps.47 million from the previous year. The revenue was directly related to the export of programs to global audiences, especially outstanding were Cielo Rojo and Emperatriz, which where commercialized in Europe and Africa; as well as Lo que Callamos las Mujeres in Latin America.

Revenue from barter sales was Ps.104 million in the period, compared to Ps.82 million in the previous year.

Costs and expenses

The 2% increase in costs and expenses was the result of a 2% growth in production, programming and transmission costs —to Ps.1,428 million, from Ps.1,406 million in the same period a year ago— and a 5% increase in selling and administrative expenses —to Ps.314 million, from Ps.299 million in the same quarter of 2010.

The costs increase is the result of the production of content that positively influenced audience share and allowed a wide number of advertisers to reach their client base directly, having an important positive effect on the revenue for the period.

Selling and administrative expense changes are the result of growing company operations.

EBITDA and net income

EBITDA was Ps.1,287 million, compared to Ps.1,101 million in the same period of the prior year; the EBITDA margin was 42% this period, compared to 39% from last year.

The most significant change below EBITDA was a Ps.237 million deterioration in the exchange result, mainly related to the devaluation of the Mexican peso this period.

Net income for the period was Ps.380 million, compared to Ps.416 million from a year ago.

Debt

As of September 30, 2011, Azteca's outstanding debt —excluding Ps.1,607 million debt due in 2069—was Ps.10,027 million.  

The cash balance of the company was Ps.7,180 million, compared to Ps.3,341million a year ago. As a result, net debt was Ps.2,847 million, 36% below the Ps.4,476 million from the prior year.  Debt to last twelve months (LTM) EBITDA ratio was 2.1 times, and net debt to LTM EBITDA was 0.6 times.

Nine months results

Net sales in the first nine months of the year were Ps.8,081 million, 2% above the Ps.7,887 million in the same period of 2010. Total costs and expenses were Ps.5,012 million, from Ps.4,979 million in the same period a year ago. As a result, Azteca reported EBITDA of Ps.3,069 million, 6% above the Ps.2,907 million from the prior year.  The EBITDA margin for the nine months period was 38%, one percentage point above the same period of the prior year. The company recorded net income of Ps.936 million, 1% above the Ps.928 million for the same period of 2010.

Company Profile

Azteca is one of the two largest producers of Spanish-language television programming in the world, operating two national television networks in Mexico, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across the country.  Azteca affiliates include Azteca America Network, a broadcast television network focused on the rapidly growing U.S. Hispanic market, and Azteca Web, an Internet company for North American Spanish speakers.

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 a as a management development and decision forum for the top leaders of member companies. The companies include: Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx) and Grupo Iusacell (www.iusacell.com).  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.

SOURCE Azteca