ABS-CBN Corp. announced on Tuesday that it had reduced its net loss for 2021 to 5.67 billion pesos from a loss of 13.53 billion pesos previously, mainly due to lower expenses resulting from the cessation of some of its activities and production of content. .
The media company saw its total revenue drop 16.8% in 2021 to 17.8 billion pesos from 21.42 billion pesos the previous year, according to its annual financial report.
Broken down, its advertising revenue fell 25% to 5.29 billion pesos in 2021 from 7.06 billion pesos in 2020, while consumer sales fell 12.7% to 12.53 billion pesos from 14.36 billion pesos the previous year.
The decline in advertising revenue is “attributable to the company’s absence from the free-to-air advertising space following the cease and desist order issued by the National Telecommunications Commission (NTC) on the operations of broadcast of the company on May 5, 2020 and the possible passage of a resolution denying the company’s franchise application by the House Committee on Legislative Franchises on July 10, 2020,” ABS-CBN said.
“The cease and desist order also affected consumer sales as it prohibited the company from engaging in Sky Cable’s DTH (direct to home) services and the distribution of TV Plus Boxes,” said he added.
At the same time, the company said the impact of the coronavirus pandemic has prevented it “from generating revenue from concerts and events as well as box office receipts.”
The health crisis has also resulted in “the cessation of various ancillary operations such as Heroes Burger, Kidzania Manila and Studio XP”.
ABS-CBN’s costs and expenses fell 32.8% to 23.26 billion pesos in 2021 from 33.55 billion pesos previously.
Broken down, production costs fell 30.6% to 7.15 billion pesos from 10.31 billion pesos in 2020, while the cost of sales and services fell 15.8% to 7.93 billion pesos against 9.42 billion pesos the previous year.
The company’s general and administrative expenses fell 46.1% to 8.17 billion pesos from 13.82 billion pesos in 2020.
“In accordance with the directive from the Office of the President of the Philippines imposing strict social distancing measures on March 15, 2020, the company ceased content production on the same day. This production shutdown was extended after the cease and desist order was issued by the NTC to the company,” ABS-CBN said.
“Instead, the company decided to align the number of programs based on partnerships the company has with different free-to-air TV operators. This alignment has resulted in lower production costs…Due to the impact cumulative of the COVID-19 (coronavirus disease 2019) outbreak and the cease-to-desist order issued by the NTC, the company was forced to cease its restaurant business, live experiences, business operations TV plus and DTH,” he added.
“This, in turn, has resulted in a reduction in the cost of sales and services…Following the events of franchise denial and the impact of COVID-19, the company has implemented stringent cost reduction measures to better manage the company’s financial performance.”
ABS-CBN shares closed down 3.30% at 9.76P each on Tuesday. — Arjay L. Balinbin