ABS-CBN Broadcasting Corp. has maintained a conservative stance amid the bleak economic environment as it focuses on reducing costs and improving profitability this year.
According to ABS-CBN chief financial officer Rolando Valdueza, the company targets to book P1 billion in savings from cost-efficiency measures by 2010.
“We are rationalizing our cost structure. We have generated close to P500 million last year in savings in cost and expenses. Our target is close to P1B for the next three years, starting 2008,” Valdueza said.
ABS-CBN president and chief operating officer Charo Santos-Concio said the company is also planning to improve the performance of its subsidiaries this year, particularly Star Records, ABS-CBN Interactive Inc. and ABS-CBN Global.
“We’ll do a business review of our subsidiaries. We want the efficiency and productivity of the parent company to be pushed to its subsidiaries,” Santos-Concio said.
ABS-CBN chairman and chief executive officer Eugenio “EL3” Lopez III, for his part, said they want to improve thevprofitability of the company’s businesses to reduce its dependence on advertising revenues.
“A significant part of our business is related to direct sales, which continue to be robust. So we are less and less dependent on advertising to continue growing our profitability, and that is really the strategic direction of the company,” he said.
ABS-CBN has reported P5.29B in consolidated revenues for the first three months of the year, driven by robust direct sales, which surged 76% to P2.52B.
Direct sales consist of cable and internet subscription fees, and earnings from the sale of products such as magazines, music and video materials.
Earlier, ABS-CBN projected a flat growth in net income this year. The company has maintained this forecast despite its record monthly revenues of P1.4B in May 2009.
“We’ll continue to manage our business as if our income is going to be flat,” EL3 said.
He stressed that ABSCBN’s performance can be more clearly reflected through its EBITDA (earnings before interest, taxes, depreciation, and amortization) rather than its net income.
“We manage our finances very differently from competitors. Our net income is not reflecting our business [as] we want to expense our expenses immediately,” he explained, saying that ABS-CBN’s EBITDA has grown 20% in the first five months at P2.6B. (Story by ABS-CBN News)
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