TV Azteca Announces 10% EBITDA Growth to Historical Maximum of Ps.1,101 Million, in 3Q10

USA - English

• Latin America - español

MEXICO CITY, Oct. 28 /PRNewswire-FirstCall/ -- TV Azteca, S.A.B. de C.V. (BMV: TVAZTCA; 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 2010.

"Our programming grids generated high levels of commercial audience throughout the day, and a growing interest of many advertisers in positioning their brands in our content in Mexico and the United States; resulting in a remarkable performance in net sales. The income grow was crucial in the strong growing of the EBITDA, reaching a historical maximum for a third quarter, as well as in the extra strengthening of the net profit", commented TV Azteca's CEO, Mario San Roman.

Third quarter results

Net sales were Ps.2,806 million, 17% above the 2,400 million of the same quarter of 2009.  Total costs and expenses were Ps.1,705 million, compared to Ps.1,398 million in the same period of the previous year.  

As a result, TV Azteca reported EBITDA of Ps.1,101 million, 10% above the Ps.1,002 million in the third quarter of 2009.  The EBITDA margin was 39%. The company registered net income of Ps.416 million, 16% higher than the Ps.358 million from the previous year.

Net sales

"We reached 40% commercial audience throughout the complete day in Mexico during the quarter, with programming that reached the target market of our advertisers, which pushed our sales even more", added Mario San Roman. "The solid income was complemented this period by the marketing of the final phase of the Soccer World Cup of South Africa, and a dynamic grow of Azteca America's sales."  

Third quarter revenue includes sales at Azteca America—the company's wholly-owned broadcast television network focused on the U.S. Hispanic market—of Ps.220 million, 12% higher than the Ps.197 million a year ago.

Revenue from barter sales was Ps.82 million in the period, from Ps.63 million in the previous year.

Costs and expenses

The 22% growth in costs and expenses resulted from a 24% increase in production, programming and transmission costs —to Ps.1,406 million, from Ps.1,130 million in the same period a year ago— and from a 12% increase in selling and administrative expenses —to Ps.299 million, from Ps.268 million in the same quarter of 2009.

The growth in costs mainly derives from the World Cup exhibition rights, as well as associated costs of the event's production and broadcast in its final phase, and production of programming related to Mexico's Independence Bicentennial.

The selling and administrative expenses results are due to higher fee payments and personnel expenses.

EBITDA and net income

EBITDA was Ps.1,101 million, 10% above the Ps.1,002 million in the same period of the prior year.

The main changes below EBITDA were i) a Ps.61 million increase in other expenses, as well as ii) a Ps.30 million reduction in integrated financing cost, mainly derived from an improved exchange result and higher interest earnings in the period.

Net income for the period was Ps.416 million, 16% higher than the Ps.358 million from a year ago.

Debt

As of September 30, 2010, TV Azteca's outstanding debt —excluding Ps.1,497 million debt due in 2069—was Ps.7,817 million, compared to Ps.7,147 million a year ago.  

The debt is peso denominated —congruent with most of the company income—and Ps.6,000 million is comprised of long-term Securities Certificates with a fixed annual interest rate of 9.29%, with interest coverage for the next three years.

The cash balance of the company was Ps.3,341 million, 31% higher than Ps.2,558 million a year ago.

Net debt was Ps.4,476 million, compared to Ps.4,589 million from the previous year.  Debt to last twelve months (LTM) EBITDA ratio was 1.7 times, and net debt to LTM EBITDA was 1 time.

Nine months results

Net sales in the first nine months of the year were Ps.7,887 million, 15% superior from the Ps.6,871 million of the same period of 2009. Total costs and expenses were Ps.4,979 million, from Ps.4,319 million in the same period a year ago, mainly derived from costs related to the World Cup transmission this year. As a result, TV Azteca recorded EBITDA of Ps.2,907 million, 14% higher than the Ps.2,552 million in the first nine months of the prior year.  The EBITDA margin for the period was 37%, without changes compared to last year. The company recorded net income of Ps.929 million, compared to Ps.452 million in the same period of 2009.

Company Profile

TV 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.  TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing U.S. Hispanic market, and Azteca Web, an Internet company for Spanish speakers.

TV 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: TV 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 TV Azteca and its subsidiaries are identified in documents sent to securities authorities.

SOURCE TV Azteca, S.A.B. de C.V.