TV Azteca Announces Net Sales of Ps. 1,781 million and EBITDA of Ps. 595 Million in 1Q07

TV Azteca Announces Net Sales of Ps. 1,781 million and EBITDA of Ps. 595 Million in 1Q07

- The Company repurchases 66 Million CPOs in the Quarter, and Plans to Convey the Benefits of the Purchase to all Shareholders -

MEXICO CITY, April 25 /PRNewswire-FirstCall/ -- TV Azteca, S.A. de C.V. (BMV: TVAZTCA; Latibex: XTZA), one of the two largest producers of Spanish- language television programming in the world, announced today net sales of Ps.1,781 million during the first quarter, compared with Ps.1,877 million in the same period of 2006. EBITDA this quarter was Ps.595 million, from Ps.696 million registered a year ago; EBITDA margin was 33%.

"The results this quarter are not completely comparable with those of the previous year, due to the strong ad investment related to extraordinary events in 2006," said Mario San Roman, CEO of TV Azteca. "But beyond the market's cyclical behavior, the company's solid fundamentals bring certainty to our perspectives. Audience share in Mexico was remarkable in the quarter, and we are building even more competitive programming grids. Additionally, sales to the US Hispanic market have been superior in the past five quarters."

On the strategic front, the company repurchased 66 million TV Azteca CPOs in the quarter, equivalent to approximately 2% of the company's outstanding shares, which represent a value of Ps.651 million, based on the April 24, 2007 CPO closing price. The company plans to convey the benefits of this buyback to all its shareholders.

Such benefits, together with the cash distributions of US$495 million since June 2003, a cancellation of 3% of the company's shares in 2005, and the future distribution of a Grupo Iusacell share for every 97 CPOs of TV Azteca -- as previously announced -- represent an accumulated yield of 41% for the company's shareholders, based on yesterday's closing price for the CPO and the shares of Grupo Iusacell.

First Quarter Results

Net sales were Ps.1,781 million, compared with Ps.1,877 million in the same quarter of 2006. Total costs and expenses were Ps.1,186 million, from Ps.1,181 million in the same period of the previous year. As a result, TV Azteca reported EBITDA of Ps.595 million, compared with Ps.696 million in the first quarter 2006. The company registered net majority income of Ps.179 million, from Ps.309 million in the same period of 2006.

1T 2006 1T 2007 Change
Ps. %

Net Sales Ps. 1,877 Ps. 1,781 Ps. (96) -5%

EBITDA Ps. 696 Ps. 595 Ps. (101) -15%

Net Majority
Income Ps. 309 Ps. 179 Ps. (130) -42%

Majority Income
per CPO Ps. 0.11 Ps. 0.06 Ps. (0.05) -42%

Million pesos of constant purchasing power as of March 31, 2007.
EBITDA is Operating Profit Before Depreciation and Amortization under
Mexican GAAP.
The number of CPOs outstanding as of March 31, 2007 was 2,927 million.

Net Sales

"In addition to the absence of extraordinary events this quarter, the Unefon contract was terminated, as previously announced, which was crucial for the period sales performance," said Mr. San Roman. "However, our 39% commercial audience share for the full day during the period and its solid trend continued to generate an unparalleled platform for the most successful ad campaigns."

First quarter revenue includes net sales from Azteca America -- the company's wholly-owned broadcast television network focused on the U.S. Hispanic market -- of Ps.121 million, 6% higher than Ps.114 million in the same period a year ago.

TV Azteca also reported programming sales to other countries of Ps.24 million, compared with Ps.20 million registered in the first quarter 2006. Exports this period were mainly due to sales of the company's novelas "Amor sin Condiciones" y "Se Busca un Hombre", and the program "Lo que Callamos las Mujeres" to several Latin American countries.

Barter sales were Ps.48 million compared with Ps.57 million from the previous year. Inflation adjustment of advertising advances was Ps.53 million, compared with Ps.46 million for the first quarter of 2006.

During the period, the company did not register ad sales to Unefon, while in the first quarter of 2006, such sales were Ps.21 million. As previously announced, during the third quarter of 2006, the board of directors approved the cancellation of the ten-year advertising contract with Unefon, which began in 1998.

Costs and Expenses

Costs and expenses did not show significant changes during the first quarter. This was the result of a combination of programming, production and transmission costs of Ps.925 million, compared with Ps.922 million in the same period of the previous year, as well as a 1% increase in administrative and selling expenses to Ps.261 million, from Ps.258 million in the same quarter of 2006.

"The stability in costs is the result of the strict control of each of the outlays that relate to content production, while we maintain the highest quality of these productions," said Carlos Hesles, CFO of TV Azteca. "Such stability is even more significant considering the rent payment of our affiliate station in Los Angeles."

As previously announced, the company's costs include an increase in the rent payment for the Los Angeles station KAZA TV of US$2.4 million in the quarter, as a result of Azteca America's agreement with Pappas Telecasting. Since July 2006, Azteca America has been making cash payments equivalent to US$9.6 million annually to Pappas Telecasting for the rent of the station, which is operated and managed by Azteca America.

The 1% rise in administrative and selling expense reflects increases in personnel, operating and travel expenditures during the period, as a result of a growing business volume in the US.

EBITDA and Net Income

The net sales reduction in the quarter, combined with total cost and expense stability, generated EBITDA of Ps.595 million, compared with Ps.696 million in the same quarter of the prior year.

Below EBITDA, the company recorded depreciation and amortization of Ps.107 million from Ps.89 million of the previous year, mainly due to an increase of Ps.12 million in the depreciation account, as a result of a higher balance of fixed assets.

TV Azteca recorded other expenses of Ps.76 million, compared with Ps.58 million of the prior year. The main concepts integrating the account were Ps.54 million of donations, Ps.23 million in legal fees, as well as other income of Ps.1 million from the net effect of the recognition of participation, through the equity method, of the losses of Todito Card and Monarcas -- TV Azteca's soccer team -- and amortization of preoperative expenses of Azteca America and other income.

Net comprehensive financing cost during the quarter was Ps.172 million, compared with Ps.169 million in the same period of 2006. Interests paid in the period were Ps.192 million, unchanged from the prior year. Other financial expense decreased Ps.14 million, mainly due to premiums from early debt amortizations a year ago. Interest income increased Ps.11 million, due to a higher average cash balance in the quarter. The company registered a foreign exchange loss of Ps.1 million this quarter, compared with a profit of Ps.35 million a year ago. This quarter's exchange loss resulted from the combination of a 2% depreciation of the peso against the dollar, and an average net liability position in U.S. dollars in the period. There was a Ps.6 million monetary gain due to a liability monetary position this quarter.

Provision for income tax was Ps.46 million, practically the same as the prior year.

Net income of minority stockholders was Ps.15 million, compared with Ps.23 million a year ago. Net income of minority stockholders represents 50% of Azteca Web's net income, which TV Azteca consolidates in its results, and that belongs to CNCI, owner of half of that company.

Net income of majority stockholders in the quarter was Ps.179 million, compared with Ps.309 million in the same period of 2006.

Outstanding Debt

As of March 31, 2007, the company's total outstanding debt was Ps.7,765 million. TV Azteca's cash balance was Ps.1,912 million, resulting in net debt of Ps.5,853 million. The total debt to last twelve months (LTM) EBITDA ratio was 1.9 times, and net debt to EBITDA was 1.4 times. LTM EBITDA to net interest expense ratio was 6.3 times.

Excluding-for analytical purposes-Ps.1,323 million debt due 2069, total debt was Ps.6,442 million and total debt to EBITDA ratio was 1.5 times.

Company Profile

TV Azteca is one of the two largest producers of Spanish-language television programming in the world, operating two national television networks in Mexico, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market, and Azteca Web, an Internet company for North American Spanish speakers.

TV Azteca is a company of Grupo Salinas (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas, Grupo Salinas operates as a management development and decision forum for the top leaders of member companies.

Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Other risks that may affect TV Azteca and its subsidiaries are identified in documents sent to securities authorities.

Investor Relations:
Bruno Rangel Marcia San Roman
+ 52 (55) 1720 9167 + 52 (55) 1720 0041
jrangelk@tvazteca.com.mxmsromang@tvazteca.com.mx

Press Relations:
Tristan Canales Daniel McCosh
+ 52 (55) 1720 1441 + 52 (55) 1720 0059
tcanales@gruposalinas.com.mxdmccosh@tvazteca.com.mx

First Call Analyst:
FCMN Contact: msromang@tvazteca.com.mx

Source: TV Azteca, S.A. de C.V.

CONTACT: Investors, Bruno Rangel, +011-52-55-1720-9167,
jrangelk@tvazteca.com.mx, Marcia San Roman, +011-52-55-1720-0041,
msromang@tvazteca.com.mx , or Media, Tristan Canales, +011-52-55-1720-1441,
tcanales@gruposalinas.com.mx , Daniel McCosh, +011-52-55-1720-0059,
dmccosh@tvazteca.com.mx , all of TV Azteca

Web site:

http://www.tvazteca.com.mx/

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