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World Cup Gives Televisa a Kick

The Mexican broadcast firm made $204 million in the second quarter, up 75% from 2005. Soccer and politics helped.

July 18, 2006|From Reuters

MEXICO CITY — Mexican broadcaster Grupo Televisa said Monday that its second-quarter profit jumped 75%, helped by strong political and World Cup advertising and lower costs. However, the results were weaker than expected.

Televisa earned $204 million, compared with $120.2 million last year. Revenue climbed 21% to $893 million from $738 million.

Analysts surveyed by Reuters had forecast profit of $221 million.

The broadcaster reaped additional income from political parties placing advertisements in the run-up to Mexico's July 2 presidential election and on heavy demand during World Cup soccer games aired from Germany.

Televisa also had lower financial costs in the quarter, thanks to a 404-million peso foreign exchange gain compared with a hefty loss in the year-ago period.

Earnings before interest, taxes, depreciation and amortization, a key performance gauge also known as EBITDA, came in at 4.45 billion pesos, up 33% from the second quarter last year.

Televisa, whose tear-jerking soap operas are staples in many households across the globe, also boosted its outlook for profit margin this year.

Televisa said it expected EBITDA margin for its core broadcast business to exceed 50% in 2006 and show 42% growth on a consolidated basis.

In the previous quarter, Televisa had forecast EBITDA margin of about 49% for its broadcast unit and 40% overall.

As in previous quarters, broadcast and satellite television were the main revenue drivers, with sales in both segments up 22%. Higher ratings in soap operas and reality shows gave an extra push to the broadcast business.

The subscriber base for Televisa's satellite television unit rose 17% in the second quarter, with many customers lining up the Sky brand feed before the World Cup. Half of the 60-plus matches in Germany were aired exclusively through Televisa's direct-to-home service.

Publishing revenue rose 13% as Televisa expanded its magazine titles.

Televisa failed in its bid to buy Century City-based Univision Communications Inc., the largest U.S. Spanish-language broadcaster, after a group including Providence Equity Partners Inc. and media investor Haim Saban offered $36.25 a share, or $12.3 billion. A group led by Televisa, which provides most of Univision's programming in a contract that ends in 2017, offered $35.75 a share.

Televisa said last week it might sell its Univision stake and tap the U.S. Latin market without its partner.

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