Azteca Announces EBITDA of Ps.966 Million for the Second Quarter of 2012

Latin America - español

- Net sales increase 6% in the quarter to historical maximum of Ps.2,994 million -

- During the first six months of the year, net sales expand 10% and EBITDA 8% -

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Jul 24, 2012, 08:05 ET

MEXICO CITY, July 24, 2012 /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 second quarter of 2012.

"We reached a historical maximum in sales for a second quarter, resulting from growing demand from advertisers looking to build far-reaching advertising campaigns through our programming, with remarkable success in all time slots in all our channels," commented Mario San Roman, CEO of Azteca.

Second quarter results

Net sales for the quarter were Ps.2,994 million, 6% above the Ps.2,817 million for the same quarter of 2011. Total costs and expenses were Ps.2,028 million, from Ps.1,853 million in the same period of the previous year.

As a result, Azteca reported EBITDA of Ps.966 million, from Ps.964 million for the same period of last year. The EBITDA margin was 32%. The company registered net income of Ps.40 million, compared to Ps.394 million for the same quarter of 2011.



	2Q 2011	2Q 2012	Change
			Ps.	%

Net sales	$2,817	$2,994	$177	6%

EBITDA	$964	$966	$2	0%

Net income	$394	$40	$(354)	---

Net income per CPO	$0.13	$0.01	$(0.12)	---

Figures in millions of pesos. EBITDA: Operating Profit Before Depreciation and Amortization. The number of CPOs outstanding as of June 30, 2011 was 3,000 million and as of June 30, 2012 was 2,985 million.

Net sales

Domestic ad sales were Ps.2,706 million in the period, 5% above the Ps.2,585 million from the same period of the previous year. The increase reflects the solid interest of numerous advertisers in Mexico to reach their target markets through the programming of Azteca.

Sales were complemented by revenue from Azteca America—the company's wholly-owned broadcast television network focused on the U.S. Hispanic market—of Ps.229 million, 15% above the Ps.200 million a year ago.

Programming sales to other countries were Ps.59 million in the period, well above the Ps.32 million from the previous year. The revenue was directly related to the export of popular programs for global audiences, of which Quererte asi, Cielo Rojo and La Mujer de Judas, stood out and were commercialized in several countries of Central and South America.

Costs and expenses

The 9% increase in costs and expenses during the period was the result of a 12% growth in production, programming and transmission costs —to Ps.1,650 million, from Ps.1,478 million in the same period a year ago— and a 1% increase in selling and administrative expenses —to Ps.379 million, from Ps.375 million in the same quarter of 2011.

The costs increase is the result of the production of successful content, which further drove the demand for advertising from numerous clients, and strengthened the preference for our content abroad.

The performance of sales and administrative expenses is mainly related to the growth in advisory fees and services payments. However, the increase in expenses is smaller than the expansion in net sales, reflecting effective actions to improve the operating efficiency of the company.

EBITDA and net income

EBITDA was Ps.966 million, compared to Ps.964 million in the same period of last year; the EBITDA margin was 32% for this period.

The most significant change below EBITDA was a Ps.289 million increase in the financial cost, mainly related to the foreign exchange loss for the period.

Net income for the quarter was Ps.40 million, compared to Ps.394 million from a year ago.

Debt

As of June 30, 2012, Azteca's outstanding debt —excluding Ps.1,635 million debt due in 2069—was Ps.9,394 million.

The cash balance of the company was Ps.7,764 million, compared to Ps.7,248 million a year ago. As a result, net debt was Ps.1,630 million, 20% below the Ps.2,048 million from the prior year. Debt to last twelve months (LTM) EBITDA ratio was 2 times, and net debt to LTM EBITDA was 0.3 times.

Six months results

Net sales in the semester were Ps.5,745 million, 10% above Ps.5,203 million in the same period of 2011. Total costs and expenses were Ps.3,929 million, from Ps.3,525 million from the second quarter of a year ago. As a result, Azteca reported EBITDA of Ps.1,816 million, 8% above the Ps.1,678 million from the first semester of the prior year; the EBITDA margin for this six months period was 32%, unchanged from the prior year. The company recorded net income of Ps.478 million, from Ps.555 million for the same period of the previous year.



	6M2011	6M2012	Change
			Ps.	%

Net sales	$5,203	$5,745	$542	10%

EBITDA	$1,678	$1,816	$138	8%

Net income	$555	$478	$(77)	-14%

Net income per CPO	$0.19	$0.16	$(0.03)	-14%

Figures in millions of pesos. EBITDA: Operating Profit Before Depreciation and Amortization. The number of CPOs outstanding as of June 30, 2011 was 3,000 million and as of June 30, 2012 was 2,985 million.

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.tvazteca.com.mx; www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Advance America (www.advanceamerica.net), 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.


Investor Relations:
Bruno Rangel + 52 (55) 1720 9167 [email protected]		Carlos Casillas +52 (55) 17 20 91 67 [email protected]


Press Relations:
Jaime Ramos +52 (55) 17 20 14 16 [email protected]		Daniel McCosh +52 (55) 17 20 00 59 [email protected]


TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Millions of Mexican pesos of June 30 of 2011 and 2012 )


	Second Quarter of :
	2011			2012
							Change

Net revenue	Ps	2,817	100%	Ps	2,994	100%	Ps	177	6%

Programming, production and transmission costs		1,478	52%		1,650	55%		172	12%
Selling and administrative expenses		375	13%		379	13%		4	1%
Total costs and expenses		1,853	66%		2,028	68%		175	9%

EBITDA		964	34%		966	32%		2	0%

Depreciation and amortization		125			140			15
Other expense -Net		64			94			30

Operating profit		775	28%		732	24%		(43)	-6%

Equity in income from affiliates		(1)			(13)			(12)

Comprehensive financing result:
Interest expense		(212)			(245)			(34)
Other financing expense		(25)			(109)			(85)
Interest income		36			66			30
Exchange loss -Net		(8)			(210)			(201)
		(209)			(499)			(289)

Income before the following provision		565	20%		221	7%		(344)	-61%

Provision for income tax		(171)			(184)			(13)

Net income	Ps	394		Ps	37		Ps	(357)

Non-controlling share in net profit	Ps	0		Ps	(4)		Ps	(4)

Controlling share in net profit	Ps	394	14%	Ps	40	1%	Ps	(353)	-90%


TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Millions of Mexican pesos of June 30 of 2011 and 2012 )


	Period ended June 30,
	2011			2012
							Change

Net revenue	Ps	5,203	100%	Ps	5,745	100%	Ps	542	10%

Programming, production and transmission costs		2,820	54%		3,205	56%		384	14%
Selling and administrative expenses		704	14%		724	13%		20	3%
Total costs and expenses		3,525	68%		3,929	68%		404	11%

EBITDA		1,678	32%		1,816	32%		138	8%

Depreciation and amortization		250			270			20
Other expense -Net		106			152			46

Operating profit		1,323	25%		1,395	24%		72	5%

Equity in income from affiliates		(2)			1			3

Comprehensive financing result:
Interest expense		(407)			(489)			(82)
Other financing expense		(49)			(122)			(73)
Interest income		74			120			46
Exchange Gain -Net		12			(9)			(21)
		(370)			(500)			(130)

Income before the following provision		950	18%		895	16%		(55)	-6%

Provision for income tax		(394)			(425)			(30)

Net income	Ps	556		Ps	471		Ps	(85)

Non-controlling share in net profit	Ps	1		Ps	(7)		Ps	(8)

Controlling share in net profit	Ps	555	11%	Ps	478	8%	Ps	(77)	-14%


TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Mexican pesos of June 30 of 2011 and 2012)


	At June 30
	2011		2012
					Change
Current assets:
Cash and cash equivalents	Ps	7,248	Ps	7,764	Ps	516
Accounts receivable		6,245		7,270		1,025
Other current assets		2,184		2,381		197

Total current assets		15,677		17,415		1,738	11%

Exhibition rights		1,090		1,367		277
Property, plant and equipment-Net		3,144		3,608		464
Television concessions-Net		6,532		6,936		404
Other assets		890		1,225		335
Goodwill -Net		19		-		(19)
Deferred income tax asset		4,456		4,277		(179)
Total long term assets		16,131		17,413		1,282	8%

Total assets	Ps	31,808	Ps	34,828	Ps	3,020	9%


Current liabilities:
Short-term debt	Ps	458	Ps	629	Ps	171
Other current liabilities		2,272		2,672		400

Total current liabilities		2,730		3,301		571	21%

Long-term debt:
Structured Securities Certificates		8,838		4,755		(4,083)
Long-term debt		-		4,010		4,010
Total long-term debt		8,838		8,765		(73)
Other long term liabilities:
Advertising advances		6,905		7,665		760
American Tower Corporation (due 2069)		1,418		1,635		217
Deferred income tax asset		3,572		3,106		(466)

Total other long-term liabilities		11,895		12,406		511	4%

Total liabilities		23,463		24,472		1,009	4%

Total stockholders' equity		8,345		10,356		2,011	24%

Total liabilities and equity	Ps	31,808	Ps	34,828	Ps	3,020	9%