TV5 losses doubled to P4.1B in 2011

THE COUNTRY’S third-largest television network doubled its losses last year amid the cutthroat competition in the broadcasting industry.

Financial statements filed by ABC Development Corp., the parent firm of TV5, showed the company lost P4.14 billion in 2011, 91 percent more than its net loss of P2.16 billion the previous year.

In contrast, industry leaders ABS-CBN Broadcasting Corp. and GMA Network reported net incomes of P2.4 billion and P1.71 billion, respectively, for 2011.

The dramatic surge in losses for TV5 which is controlled by businessman Manuel Pangilinan, comes as his group is trying to acquire GMA Network Inc.

Talks between the Pangilinan group and GMA’s controlling shareholders— the Gozon, Duavit and Jimenez families— are reportedly ongoing, but both sides have so far failed to agree on a price for the country’s second- largest network.

Sources said Pangilinan had initially balked at the P65-billion selling price first quoted by GMA’s owners, although the telecommunications tycoon lately has signaled that a deal may be in the offing before the end of the year.

TV5’s assets grew to P8.84 billion in 2011 from P5.41 billion in 2010 after the network invested in more broadcast equipment to upgrade its older apparatus. However, its receivables—unpaid obligations by its clients—also ballooned in 2011 to P1.14 billion from P443 million the previous year.

Its total liabilities also grew sharply, reaching P6.45 billion last year, from only P2.52 billion in 2010 as it borrowed more to fund its expansion.

TV5’s financial statements filed with the Securities and Exchange Commission revealed that total revenue grew sharply to P2.31 billion last year, representing a 164- percent growth from P875 million in 2010.

However, the higher sales were offset by the increase in TV5’s production costs, which hit P3.76 billion in 2011, a 105percent increase from P1.83 billion in 2010, as the company lured talents from rival networks—like Sharon Cuneta and Derek Ramsey—with large, multiyear contracts.

TV5 president Ray Espinosa has yet to comment on the network’s losses for 2011.

Espinosa, meanwhile, had said he expected TV5 to boost its market share to 30 percent by 2015, twice its present level of 15 percent.

TV5 is spending an additional P6 billion for a new corporate headquarters and studio facilities in Mandaluyong City which it expects would be completed later this year.

ABC and its TV5 network are owned by Mediaquest Holdings, which also holds a minority stake in the Philippine Daily Inquirer.