TV Azteca Announces Net Sales of Ps.1,844 Million and EBITDA of Ps.533 Million in 1Q08

TV Azteca Announces Net Sales of Ps.1,844 Million and EBITDA of Ps.533 Million in 1Q08

- Sales Grow 6% and EBITDA 4%, in Comparable Terms -

- Expansion into Guatemala Broadens Horizons Outside Mexico -

MEXICO CITY, April 23 /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.1,844 million, 1% above the same period of 2007. EBITDA was Ps.533 million, compared with Ps.611 million in the same quarter of the prior year. The EBITDA margin in the period was 29%.

In comparable terms, excluding the effects of changes in Mexican financial reporting standards, as well as the consolidation of Proyecto 40 -- UHF channel that offers pluralistic content alternatives in Mexico -- in TV Azteca results, sales grew 6%, and EBITDA 4%.

"Continued preference from advertisers to develop effective marketing campaigns in our solid programming preserved the positive sales trend, despite reduced seasonal activity due to Holy Week this quarter," commented Mario San Roman, Chief Executive Officer of TV Azteca. "Our clients' perspective is positive, and translates into solid results of the presale campaign, which together with robust operating fundamentals, anticipate a year of growth and strength in our market positioning."

"On the strategic front, we announced the launch of operations in Guatemala to take place in June, which gives an additional boost to the company's scope abroad, and enhances the outlook for revenue and profitability," added Mr. San Roman.

First Quarter Results

Net sales were Ps.1,844 million, 1% above the Ps.1,829 million in the same quarter in 2007. Total costs and expenses were Ps.1,312 million, from Ps.1,219 million in the same period of the previous year. As a result, TV Azteca reported EBITDA of Ps.533 million, compared with Ps.611 million in the first quarter of 2007. The company registered net majority loss of Ps.624 million, from a profit of Ps.184 million in the same period of 2007.

1Q 2007 1Q 2008 Change
Ps. %

Net Sales $1,829 $1,844 $15 1%

Costs and Expenses $1,219 $1,312 $93 8%

EBITDA $611 $533 ($78) -13%

Net Majority Income $184 ($625) ($809) ----

Majority Income per CPO $0.06 ($0.21) ($0.26) ----

Figures of 1Q07 in millions of pesos of constant purchasing power as of
December 31, 2007, and figures of 1Q08 in current pesos.
EBITDA is Operating Profit Before Depreciation and Amortization.
The number of CPOs outstanding as of March 31, 2008 was of 2,972 million.

First Quarter Results in Comparable Terms

Two elements in the quarter prevented a correct comparison with the same period of the prior year: i) the introduction of changes in financial reporting standards, which relate this quarter's figures in nominal pesos with figures of the same period of 2007 in constant pesos as of December 2007; and ii) the consolidation of Proyecto 40 in TV Azteca results.

With the new accounting rules, revenue is overestimated in the first quarter of 2007 by Ps.102 million compared with the same period of 2008, due to adjustment of sales of the first quarter 2007 to constant pesos as of December 2007, and elimination of recognition of inflation in advertising advances starting in the first quarter of 2008.

Regarding total costs and expenses, the adjustment of the first quarter of 2007, overestimated the figure reported a year ago by Ps.32 million.

In addition, Proyecto 40 began consolidating in TV Azteca results this quarter, with sales of Ps.12 million and costs of Ps.40 million.

In comparable terms, excluding the effects of accounting changes and the consolidation of Proyecto 40, TV Azteca sales grew 6%, and EBITDA increased 4% in the period.

1Q 2007 1Q 2008 Change
Ps. %

Net Sales $1,829 $1,844
Adjustment ($102) ($12)
Comparable Net Sales $1,727 $1,832 $105 6%

Costs and Expenses $1,219 $1,312
Adjustment ($32) ($40)
Comparable Costs and Expenses $1,187 $1,272 $85 7%

EBITDA $611 $533
Adjustment ($70) $28
Comparable EBITDA $540 $561 $21 4%

Figures of 1Q07 in millions of pesos of constant purchasing power as of
December 31, 2007 and figures of 1Q08 in current pesos.
EBITDA is Operating Profit Before Depreciation and Amortization.

Net Sales

Under the new standards for financial reporting, net sales increased 1%. "Revenue growth this quarter, in all of our business areas in Mexico, confirms the close empathy among clients and our programming, and their ongoing determination to reach audiences with superior demographics through TV Azteca," added Mr. San Roman. "The consolidation of Proyecto 40, with unparalleled programming in Mexico, further expands the perspective for revenue strength in the future."

TV Azteca programs, produces and commercializes Proyecto 40 in Mexico City, in accordance with the contracts celebrated with that channel in 1998, as was previously detailed.

First quarter revenue includes sales to other countries of Ps.28 million in the period, 13% higher than Ps.24 million registered the previous year. This quarter's growth results from sales of the company's novelas Bellezas Indomables, Mientras Haya Vida and Se Busca un Hombre, in Central and South America, and Lo que Callamos las Mujeres, in Latin America and Africa.

TV Azteca also reported net sales form Azteca America -- the company's wholly owned broadcast television network focused on the U.S. Hispanic market -- of Ps.103 million, compared with Ps.124 million a year ago. The reduction is related to the adverse economic environment in the United States.

Revenue from barter sales was Ps.52 million, 4% above Ps.50 million in the previous year.

Costs and Expenses

Under the new accounting rules, total costs and expenses grew 8% in the quarter, as a result of a 9% increase in programming, production and transmission costs -- to Ps.1,038 million, from Ps.950 million in the same period a year ago -- and a 2% increase in selling and administrative expenses -- to Ps.274 million, compared with Ps.268 million in the same quarter of 2007.

The rise in costs mainly reflects the consolidation of Proyecto 40 in TV Azteca results, the broadcast of special sports events this quarter, and the production of programs that optimally reached the company's advertisers' target market.

Growth in selling and administrative expense primarily results from a raise in advisory fees and operating and travel expenditures, in line with increased operations.

EBITDA and Net Income

Under the new reporting standards, EBITDA was Ps.533 million, from Ps.611 million in the same period a year ago.

The company reported net loss of Ps.625 million in the quarter, from net income of Ps.184 million a year ago, as a result of: i) an extraordinary increase in deferred income tax of Ps.474 million, due to presales recorded in the period; ii) an increase in other expense of Ps.237 million, coming from reserves of prior years' preoperating expenses of Proyecto 40, and iii) a Ps.29 million raise in financing cost, mainly derived from an increase in foreign exchange loss.

Outstanding Debt

As of March 31, 2008, TV Azteca's outstanding debt -- excluding Ps.1,281 million debt due 2069 -- was Ps.6,000 million, 9% less than Ps.6,616 million a year ago, reflecting the company's continued efforts to further strengthen its solid capital structure. Total debt to last twelve months (LTM) EBITDA ratio was 1.5 times, compared with 1.6 times a year ago.

Advertising Advances

The balance of advertising advances as of March 31, 2008, was Ps.5,414 million, compared with Ps.5,699 million a year ago.

Delays in the 2008 presale campaign in the sector resulted in signing advance advertising contracts within the first months of 2008 in TV Azteca. In April, there have been Ps.316 million in advance closings.

Additionally, a year ago, the company signed contracts valid for more than twelve months that have been partially accrued in TV Azteca results. As of March 31, 2007 these contracts were Ps.142 million higher than what they currently represent.

Considering presales signed in April, and excluding the excess amount of multiannual contracts a year ago, the balance of advertising advances grew 3%, under the new accounting policies.

The superior level of advertising advances represents a vote of confidence from advertisers in TV Azteca's ability to reach their target audiences in an optimal way.

Azteca America's Agreement with DirecTV

During the quarter, Azteca America signed a contract to broadcast the network's programming on channel 441 of DirecTV Mas -- leading provider of satellite television services -- nationwide in the U.S., starting in March 2008.

The agreement allows Azteca America to further expand its national coverage in the U.S. among Hispanic households within higher socioeconomic levels, as well as to provide large audiences and numerous advertisers with its successful Spanish-language content.

Expansion to Guatemala

The company announced in March that it signed a strategic alliance with Latitud TV, television company of Guatemala, to transmit its programming in that country.

Through the alliance, TV Azteca acquires approximately 70% of the equity of Latitud TV and will transmit its content on UHF channels 31 and 35, which cover Guatemala City through broadcast television, and the entire country through cable.

Starting in June this year, TV Azteca expects to program and operate the channels and to sell their advertising. It anticipates gradually gaining an increased share of the broadcast television ad market in that country, which is estimated to be worth more than US$100 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 (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, contributing to build the middle class of the countries in which they operate, and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com), Grupo Salinas operates a as a management development and decision forum for the top leaders of member companies. The companies include: TV Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx) and Grupo Iusacell (www.iusacell.com). Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, member companies share a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.

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.

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

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

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

Web site:

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

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