Discovery finds strong revenue and profit gains for Q2 2013
Editor | 31-07-2013
Recent strategic acquisitions have begun to count for Discovery Communications as much as existing lines in a markedly strong second quarter of its financial year.
For the three-month period ended 30 June 2013, Discover revealed that compared with the previous year, revenues increased 30% to $1.467 billion led by 61% growth at International Networks and 13% growth in the US.
Looking at where most of the growth was situated, revenues from US networks increased 13% to $793 million, primarily driven by advertising and distribution revenue growth. Advertising revenue increased 10% mainly due to higher delivery and increased pricing while distribution revenue increased 17%, largely due to $37 million of additional revenue from licensing agreements versus last year's second quarter. Discovery had in the quarter levied higher rates and subscriber growth primarily from networks carried on the digital tier. Distribution revenues grew 5% and total revenues grew 8% compared with the second quarter a year ago excluding licensing revenues.
The strong revenue growth was the springboard for a 23% increase in adjusted OIBDA to $668 million and net income increase of $300 million. Profit only rose by $7 million year-on-year, partially offset, said the company, by higher interest and taxes as well as increased amortisation associated with purchase price allocation for the transaction of SBS.
Commenting on the results, David Zaslav, Discovery's president and chief executive officer, said: "We further capitalised on the organic growth opportunities across our portfolio while beginning to take advantage of the benefits that our recent strategic acquisitions provide. Our sustained commitment to producing captivating content and the further expansion of global pay-TV markets combined to once again drive audience and revenue growth across our unique distribution platform. The consistent financial gains we are delivering, along with the strength of our balance sheet, enable us to return significant capital to our shareholders while thoughtfully investing in our diverse brands and platforms in order to further build additional long-term growth opportunities."
Making predictions for the rest of the year, Discovery expects total revenue between $5.550-$5.625 billion, adjusted OIBDA between $2.425 billion and $2.475 billion, and net income of $1.100-$1.150 billion.