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World Cup Ads Boost Televisa's Second-Quarter Sales

July 19, 2010


Grupo Televisa SA, a Spanish-language broadcaster based in Mexico City, announced it has seen a 14 percent increase in the second-quarter revenue. Grupo Televisa SA attributes this growth to the rise in the number of customers who had signed up for satellite TV service to watch World Cup soccer.

The company has released an e-mail statement which says that the sales have climbed up to 14.4 billion pesos which is equivalent to $1.12 billion. However, due to the increase in the programming costs, the net income has dropped from 1.83 billion pesos last year to 1.8 billion pesos this year.

In order to expand beyond its over-the-air broadcast business, Televisa is seeking more clients for its pay-TV divisions, including satellite and cable. The over-the-air broadcast business of Televisia is still its largest unit. According to the company, all 64 World Cup games were only offered by its Sky satellite division in Mexico.

In a release, Tomas Lajous, analyst at UBS AG, Mexico City said, “Sky and cable stood out. Televisa posted a strong second quarter, aided by the World Cup.” A “buy” rating on the shares has been given by Lajous.

Last quarter saw the broadcast sales increase by 10 percent. There was a 16 and 33 percent growth for the satellite division and the cable unit respectively. For a total of 2.45 million, 251,000 customers in the quarter were added by Sky.

5 percent sales growth in the broadcast unit is expected by Televisa in 2010. According to Alfonso de Angoitia, EVP, Grupo Televisa SA, after boosting their spending for the World Cup tournament, advertisers may experience a “hangover” in the second half of the year.

Televisa Deportes Network, a pay sports channel has been introduced by Televisa in 2009. In order to increase its production capabilities and boost outlets for advertisers, the company has added the cable news network Foro TV this year.

There was a drop of 21 percent in the operating profit in the pay television unit. Due to the higher interest expenses and a larger foreign-exchange loss, financing costs jumped 39 percent to 1.15 billion pesos. Operating income rose 2.3 percent to 4.23 billion pesos if these costs and taxes were left out.

Calvin Azuri is a contributing editor for TMCnet. To read more of Calvin’s articles, please visit his columnist page.

Edited by Marisa Torrieri