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

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.

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.

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.

SOURCE Azteca