TV Azteca Announces EBITDA Growth of 11%, to Alltime High of Ps.1,517 Million in 4Q07

TV Azteca Announces EBITDA Growth of 11%, to Alltime High of Ps.1,517 Million in 4Q07

- 52% EBITDA Margin in the Quarter

- Net Sales Increase 7%, to Record High of Ps. 2,898 Million in 4Q07

MEXICO CITY, Feb. 13 /PRNewswire/ -- 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 a 7% growth in net sales and an 11% increase in EBITDA for the quarter. The EBITDA margin for the period was 52%, one percentage point up compared with the same quarter a year ago.

"Sales this quarter represented a record high in the context of a strong demand for advertising within our content and an outstanding share of the commercial audience," said Mario San Roman, Chief Executive Officer of TV Azteca. "The top line dynamism, combined with expense reductions and cost controls, translated into robust EBITDA expansion, to an all time high quarterly level."

Fourth Quarter Results

Net sales were Ps.2,898 million, 7% above Ps.2,700 million in the same quarter of 2006. Total costs and expenses were Ps.1,381 million, compared with Ps.1,328 million in the same period of the prior year. As a result, TV Azteca reported EBITDA of Ps.1,517 million, 11% up from Ps.1,372 million of the fourth quarter of 2006. The company recorded net majority income of Ps.186 million, from Ps.718 million in the same period of 2006.

4Q 2006 4Q 2007 Change
Ps. %
Net Sales Ps. 2,700 Ps. 2,898 Ps. 198 7%
EBITDA Ps. 1,372 Ps. 1,517 Ps. 145 11%
Net Majority Income Ps. 718 Ps. 186 Ps. (533) -74%
Majority Income per CPO Ps. 0.24 Ps. 0.06 Ps.(0.18) -74%

Pesos of constant purchasing power as of December 31, 2007.
EBITDA is Operating Profit Before Depreciation and Amortization.
The number of CPOs outstanding as of December 31, 2007 is 2,990 million.

Net Sales

"Our successful programming was the optimal vehicle for numerous advertising campaigns in all timeslots, with notable strength in prime time, where commercial audience share in the quarter was 47%," added Mr. San Roman. "Advertisers generated continuous demand for our content, to effectively reach large viewerships, which constitute their target market."

Fourth quarter revenue includes net sales from Azteca America--the company's wholly owned broadcast television network focused on the US Hispanic market--of Ps.132 million, 8% above Ps.122 million a year ago. This period's figure represents the eighth quarter of continued growth in network sales.

TV Azteca also reported programming sales to other countries of Ps.26 million in the period, 13% above Ps.23 million of the prior year. The growth this quarter was mainly due to sales of the company's novelas, Mientras Haya Vida and Se Busca un Hombre, in South America and Europe, and Bellezas Indomables in Central and South America.

Barter sales were Ps.113 million, compared with Ps.119 million of the previous year. Inflation adjustment of advertising advances was Ps.39 million, compared with Ps.33 million for the fourth quarter of 2006.

Costs and Expenses

The 4% increase in costs and expenses during the fourth quarter resulted from the combined effect of a 6% rise in programming, production and transmission costs--to Ps.1,079 million, from Ps.1,017 million in the same period of the prior year--together with a 3% decrease in administrative and selling expenses--to Ps.302 million, from Ps.311 million in the same quarter of 2006.

The increase in costs, which is lower than the growth in net revenue, reflects efficiency gains in content production processes, as well as a strict budgeting and control of each one of the cost lines.

The reduction in administrative and selling expenses results from decreases in personnel expenses, and travel and services outlays, in spite of the solid growth in operations.

EBITDA and Net Income

EBITDA grew 11% to an all time high of Ps.1,517 million, from Ps.1,372 million in the same period of the prior year.

Net income decreased 74% this quarter, to Ps.186 million from Ps.718 million, due mainly to the net effect of: i) a Ps.548 million increase of the provision for income tax, derived from an extraordinary charge in deferred income tax, due to lower fiscal benefits at the company in the 2007 fiscal year; ii) growth in other expenses of Ps.174 million, due to increased donations; and iii) a Ps.43 million reduction in comprehensive financing cost, due mainly to a decrease in other financing expenses.

Outstanding Debt

As of December 31, 2007, TV Azteca's outstanding debt-excluding Ps.1,301 million debt due 2069-was Ps.6,000 million, 23% less than Ps.7,780 million a year ago, reflecting the company's focus to further strengthen its solid capital structure. The total debt to last twelve months ratio was 1.5 times, compared with 1.8 times in 2006.

Azteca America's Broadcast Agreement in Los Angeles

During the quarter, Azteca America agreed to continue airing its programming until December 2012 on the Los Angeles station KAZA-TV Channel 54, from Pappas Telecasting. Under the contract, the US$129 million payable by Pappas to Azteca America has been adjusted and extended.

The agreement ensures Azteca America a long-term presence in the most important US Hispanic market, and allows it to continue adding value and steadily rise the company's profitability.

Twelve Month Results

This year's net sales were Ps.9,503 million, compared with Ps.9,940 million in 2006. The decrease results from extraordinary income in 2006 related to the transmission of the Soccer World Cup and to political advertising, which were partially compensated by a solid performance of the company's sales in Mexico and the US in 2007. Total costs and expenses were Ps.5,481 million, from Ps.5,549 million in the prior year. As a result, TV Azteca reported EBITDA of Ps.4,022 million, compared with Ps.4,391 million a year ago. The company recorded net majority income of Ps.1,041 million, from Ps.2,251 million in 2006.

2006 2007 Change
Ps. %
Net Sales Ps. 9,940 Ps. 9,503 Ps. (437) -4%
EBITDA Ps. 4,391 Ps. 4,022 Ps. (369) -8%
Net Majority Income Ps. 2,251 Ps. 1,041 Ps. (1,210) -54%
Majority Income per CPO Ps. 0.75 Ps. 0.35 Ps. (0.40) -54%

Pesos of constant purchasing power as of December 31, 2007.
EBITDA is Operating Profit Before Depreciation and Amortization.
The number of CPOs outstanding as of December 31, 2007 is 2,990 million.

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, and Proyecto 40 that is broadcast in UHF. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing U.S. Hispanic market, and Azteca Web, an Internet company for North American Spanish speakers.

TV Azteca is a Grupo Salinas company (http://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 Carla SanchezArmas
+ 52 (55) 1720 9167 + 52 (55) 1720 0041
jrangelk@tvazteca.com.mxcsanchezarmas@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: csanchezarmass@tvazteca.com.mx

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

CONTACT: Investors, Bruno Rangel, +011-52-55-1720-9167,
jrangelk@tvazteca.com.mx, or Carla SanchezArmas, +011-52-55-1720-0041,
csanchezarmas@tvazteca.com.mx, both of TV Azteca; Media, Tristan Canales,
Grupo Salinas, +011-52-55-1720-1441, tcanales@gruposalinas.com.mx, or Daniel
McCosh, TV Azteca, +011-52-55-1720-0059, dmccosh@tvazteca.com.mx

Web site:

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

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