TV Azteca Announces 10% EBITDA Growth to Historical Maximum of Ps.1,101 Million, in 3Q10

TV Azteca Announces 10% EBITDA Growth to Historical Maximum of Ps.1,101 Million, in 3Q10

--Solid performance of Net Sales, 17% growth, to Ps.2,806 million--

--Azteca America's net income of Ps.220 million, 12% above of last year--

--Net income grows 16% to Ps.416 million--

MEXICO CITY, Oct. 28 /PRNewswire-FirstCall/ -- TV Azteca, S.A.B. de C.V. (BMV: TVAZTCA; Latibex: XTZA), one of the two largest producers of Spanish-language television programming in the world, announced today financial results for the third quarter of 2010.

"Our programming grids generated high levels of commercial audience throughout the day, and a growing interest of many advertisers in positioning their brands in our content in Mexico and the United States; resulting in a remarkable performance in net sales. The income grow was crucial in the strong growing of the EBITDA, reaching a historical maximum for a third quarter, as well as in the extra strengthening of the net profit", commented TV Azteca's CEO, Mario San Roman.

Third quarter results

Net sales were Ps.2,806 million, 17% above the 2,400 million of the same quarter of 2009. Total costs and expenses were Ps.1,705 million, compared to Ps.1,398 million in the same period of the previous year.

As a result, TV Azteca reported EBITDA of Ps.1,101 million, 10% above the Ps.1,002 million in the third quarter of 2009. The EBITDA margin was 39%. The company registered net income of Ps.416 million, 16% higher than the Ps.358 million from the previous year.

3Q 2009 3Q 2010 Change
Ps. %
--- ---

Net sales $2,400 $2,806 $406 17%

EBITDA $1,002 $1,101 $98 10%

Net income $358 $416 $58 16%

Net income per CPO $0.12 $0.14 $0.02 12%

Figures in millions of pesos.
EBITDA: Operating Profit Before Depreciation and Amortization.
The number of CPOs outstanding as of September 30 2009 was 2,905
million and as of September 30,2010 was 3,000 million.

Net sales

"We reached 40% commercial audience throughout the complete day in Mexico during the quarter, with programming that reached the target market of our advertisers, which pushed our sales even more", added Mario San Roman. "The solid income was complemented this period by the marketing of the final phase of the Soccer World Cup of South Africa, and a dynamic grow of Azteca America's sales."

Third quarter revenue includes sales at Azteca America--the company's wholly-owned broadcast television network focused on the U.S. Hispanic market--of Ps.220 million, 12% higher than the Ps.197 million a year ago.

Revenue from barter sales was Ps.82 million in the period, from Ps.63 million in the previous year.

Costs and expenses

The 22% growth in costs and expenses resulted from a 24% increase in production, programming and transmission costs --to Ps.1,406 million, from Ps.1,130 million in the same period a year ago-- and from a 12% increase in selling and administrative expenses --to Ps.299 million, from Ps.268 million in the same quarter of 2009.

The growth in costs mainly derives from the World Cup exhibition rights, as well as associated costs of the event's production and broadcast in its final phase, and production of programming related to Mexico's Independence Bicentennial.

The selling and administrative expenses results are due to higher fee payments and personnel expenses.

EBITDA and net income

EBITDA was Ps.1,101 million, 10% above the Ps.1,002 million in the same period of the prior year.

The main changes below EBITDA were i) a Ps.61 million increase in other expenses, as well as ii) a Ps.30 million reduction in integrated financing cost, mainly derived from an improved exchange result and higher interest earnings in the period.

Net income for the period was Ps.416 million, 16% higher than the Ps.358 million from a year ago.

Debt

As of September 30, 2010, TV Azteca's outstanding debt --excluding Ps.1,497 million debt due in 2069--was Ps.7,817 million, compared to Ps.7,147 million a year ago.

The debt is peso denominated --congruent with most of the company income--and Ps.6,000 million is comprised of long-term Securities Certificates with a fixed annual interest rate of 9.29%, with interest coverage for the next three years.

The cash balance of the company was Ps.3,341 million, 31% higher than Ps.2,558 million a year ago.

Net debt was Ps.4,476 million, compared to Ps.4,589 million from the previous year. Debt to last twelve months (LTM) EBITDA ratio was 1.7 times, and net debt to LTM EBITDA was 1 time.

Nine months results

Net sales in the first nine months of the year were Ps.7,887 million, 15% superior from the Ps.6,871 million of the same period of 2009. Total costs and expenses were Ps.4,979 million, from Ps.4,319 million in the same period a year ago, mainly derived from costs related to the World Cup transmission this year. As a result, TV Azteca recorded EBITDA of Ps.2,907 million, 14% higher than the Ps.2,552 million in the first nine months of the prior year. The EBITDA margin for the period was 37%, without changes compared to last year. The company recorded net income of Ps.929 million, compared to Ps.452 million in the same period of 2009.

9M 2009 9M 2010 Change
Ps. %
--- ---

Net sales $6,871 $7,887 $1,016 15%

EBITDA $2,552 $2,907 $355 14%

Net income $452 $929 $477 106%

Net income per CPO $0.16 $0.31 $0.15 99%

Figures in millions of pesos.
EBITDA: Operating Profit Before Depreciation and Amortization.
The number of CPOs outstanding as of September 30, 2009 was 2,905
million and as of September 30, 2010 was 3,000 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. 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 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.

Investor Relations:
Bruno Rangel Carlos Casillas
+ 52 (55) 1720 9167 + 52 (55) 1720 0041
jrangelk@tvazteca.com.mx cjcasillas@tvazteca.com.mx

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

TV AZTECA, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Millions of Mexican pesos of September 30 of 2009 and 2010 )

Third Quarter of :
-------------------
2009 2010
---- ----
Change
------

Net revenue Ps 2,400 100% Ps 2,806 100% Ps 406 17%
--- ---

Programming,
production and
transmission
costs 1,130 47% 1,406 50% 276 24%
Selling and
administrative
expenses 268 11% 299 11% 32 12%

Total costs and
expenses 1,398 58% 1,705 61% 308 22%
----- ----- ---

EBITDA 1,002 42% 1,101 39% 98 10%

Depreciation and
amortization 127 133 5

Operating profit 875 36% 968 34% 93 11%
--- --- ---

Other expense
-Net (172) (233) (61)

Comprehensive
financing
result:
Interest expense (208) (216) (8)
Other financing
expense (22) (17) 5
Interest income 12 21 9
Exchange (loss )
gain -Net (20) 4 24
(238) (208) 30
---- ---- ---

Income before the
following
provision 465 19% 527 19% 61 13%

Provision for
income tax (107) (110) (3)

Net income Ps 358 Ps 416 Ps 58
=== === === === === ===

Non-controlling
share in net
profit Ps 0 Ps 0 Ps (0)
=== === === === === ===

Controlling share
in net profit Ps 358 15% Ps 416 15% Ps 58 16%
=== === === === === ===

TV AZTECA, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Millions of Mexican pesos of September 30 of 2009 and 2010 )

Period ended September 30,
--------------------------
2009 2010
---- ----

Net revenue Ps 6,871 100% Ps 7,887 100%
--- ----- --- -----

Programming, production
and transmission costs 3,527 51% 4,115 52%
Selling and
administrative expenses 791 12% 864 11%
--- ---
Total costs and expenses 4,319 63% 4,979 63%
----- -----

EBITDA 2,552 37% 2,907 37%

Depreciation and
amortization 380 394

Operating profit 2,172 32% 2,514 32%
----- -----

Other expense -Net (530) (493)
---- ----

Comprehensive financing
result:
Interest expense (665) (639)
Other financing expense (52) (62)
Interest income 49 75
Exchange (loss) Gain
-Net (68) 5
--- ---
(736) (620)
---- ----

Income before the
following provision 906 13% 1,400 18%

Provision for income tax (454) (471)
---- ----

Net income Ps 452 Ps 929
=== === === ===

Non-controlling share
in net profit Ps 1 Ps 1
=== === === ===

Controlling share in net
profit Ps 451 7% Ps 928 12%
=== === === ===

Change
------

Net revenue Ps 1,016 15%
--- -----

Programming, production
and transmission costs 588 17%
Selling and
administrative expenses 73 9%
---
Total costs and expenses 661 15%
---

EBITDA 355 14%

Depreciation and
amortization 14

Operating profit 341 16%
---

Other expense -Net 37
---

Comprehensive financing
result:
Interest expense 26
Other financing expense (10)
Interest income 26
Exchange (loss) Gain
-Net 74
---
116
---

Income before the
following provision 494 55%

Provision for income tax (18)
---

Net income Ps 477
=== ===

Non-controlling share
in net profit Ps 0
=== ===

Controlling share in net
profit Ps 477 106%
=== ===

TV AZTECA, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Mexican pesos of September 30 of 2009 and 2010 )

At September 30
---------------
2009 2010
---- ----
Change
------
Current assets:
Cash and cash equivalents Ps 2,558 Ps 3,341 Ps 783
Accounts receivable 3,711 4,120 409
Other current assets 2,070 2,272 202

Total current assets 8,339 9,733 1,394 17%

Long-term accounts
receivable from Pappas 2,080 1,510 (570)
Exhibition rights 469 913 444
Property, plant and
equipment-Net 3,082 3,126 44
Television concessions-Net 4,649 4,648 (1)
Other assets 1,621 1,801 180
Goodwill -Net 159 - (159)
Deferred income tax asset 254 4,253 3,999
Total long term assets 12,314 16,251 3,937 32%

Total assets Ps 20,653 Ps 25,984 Ps 5,331 26%
== ====== == ====== == =====

Current liabilities:
Short-term debt Ps 1,147 Ps 1,680 Ps 533
Other current liabilities 2,753 2,573 (180)

Total current liabilities 3,900 4,253 353 9%

Long-term debt:
Structured Securities
Certificates 6,000 6,000 -
Long-term debt - 137 137
Total long-term debt 6,000 6,137 137
Other long term
liabilities:
Advertising advances 3,724 4,039 315
American Tower Corporation
(due 2069) 1,617 1,497 (120)
Deferred income tax asset - 3,378 3,378

Total other long-term
liabilities 5,341 8,914 3,573 67%

Total liabilities 15,241 19,304 4,063 27%

Total stockholders' equity 5,412 6,680 1,268 23%

Total liabilities and
equity Ps 20,653 Ps 25,984 Ps 5,331 26%
=== ====== === ====== === =====

SOURCE TV Azteca, S.A.B. de C.V.

TV Azteca, S.A.B. de C.V.

CONTACT: TV Azteca Investor Relations, Bruno Rangel, +011-52-55-1720-9167, jrangelk@tvazteca.com.mx, or Carlos Casillas, +011-52-55-1720-0041, cjcasillas@tvazteca.com.mx; or Press Relations, Tristan Canales, +011-52-55-1720-1441, tcanales@gruposalinas.com.mx, or Daniel McCosh, +011-52-55-1720-0059, dmccosh@tvazteca.com.mx

Web Site: http://www.irtvazteca.com

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