Grupo Televisa sees pay-TV success but declining profits

Gabriel Miramar-Garcia ©RapidTVNews | 21-02-2012

Grupo Televisa SAB, the world’s largest Spanish-language broadcaster, saw fourth-quarter profit fall 17% even as other metrics remained strong.
Televisa, which controls three cablecos in Latin America, added 61,000 TV subscribers, 92,000 Internet users and 40,000 voice subscriptions in Q4 2011, while advertising sales revenue rose 11% and operating profit was up 16%. Even so, net income declined to $169 million, thanks to a weaker peso, higher interest rates and, ironically, pay-TV success.
DirecTV owns 42 percent of the Televisa satellite business (which added 184,000 subscribers for a total of 4 million customers in 2011), while Grupo Multimedios owns half of its TVI cable unit, so increased revenue in these two divisions translated to increased payouts to those partners (385 million pesos, compared to 94 million pesos one year earlier), which ate into profit margins for the quarter.
Meanwhile financing costs were up 54 percent.
Going forward, Executive Vice President Alfonso de Angoitia told investors that advertising, cable network subscriptions and syndication taken together should expand 6% to 7% this year, with an operating profit margin of 47%.
CapEx will reach $850 million, including $475 million for the cable unit, $250 million for satellite and $125 million for programming expenses, he said. Royalties from Univision, which licences Televisa programming, will climb 8.9% to $245 million this year.