International Entertainment News: Azteca Announces 3Q EBITDA Growth of 17% to Historical Maximum of Ps.1,287 Million

Azteca Announces 3Q EBITDA Growth of 17% to Historical Maximum of Ps.1,287 Million

--EBITDA margin grows three percentage points to 42%--

--Net sales rise 8%, to Ps.3,030 million, supported by the dynamism of Azteca America and exports--

--Continuous strength in audience levels, 42% full day share--

MEXICO CITY, Oct. 27, 2011 /PRNewswire/ -- TV Azteca, S.A.B. de C.V. (BMV: AZTECA; 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 2011.

"We achieved outstanding sales in the context of superior audience share levels, that generated growing demand for advertising in Mexico and the United States, as well as strong interest for our content in the rest of the world during this period," commented Mario San Roman, CEO of Azteca. "The higher income in conjunction with operational efficiency, resulted in the solid growth of the EBITDA to historical maximums for a third quarter and a three percentage point expansion in EBITDA margin, to 42%."

Third quarter results

Net sales were Ps.3,030 million, 8% above of Ps.2,806 million for the same quarter of 2010. Total costs and expenses were Ps.1,743 million, from Ps.1,705 million in the same period of the previous year.

As a result, Azteca reported EBITDA of Ps.1,287 million, 17% more than the Ps.1,101 million in the third quarter of 2010 and a historical maximum for a third quarter. The EBITDA margin was 42%, three percentage points higher than last year. The company registered net income of Ps.380 million, compared to Ps.416 million from the previous year.

3Q 2010 3Q 2011 Change
Ps. %
--- ---

Net sales $2,806 $3,030 $223 8%

EBITDA $1,101 $1,287 $186 17%

Net income $416 $380 $(36) -9%

Net income per CPO $0.14 $0.13 $(0.01) -9%

Figures in millions of pesos.
EBITDA: Operating Profit Before Depreciation and Amortization.
The number of CPOs outstanding as of September 30, 2010 was
3,000 million and as of September 30,
2011 was 2,985 million.

Net sales

"The solid programming grids generated an audience share growth in Mexico to 42% for the full day during this quarter, which translated to an additional interest for the development of successful advertising campaigns on our screens," added Mr. San Roman. "This was crucial for the success in superior sales in the period, despite the tough comparison against the revenue related to the final phase of the Soccer World Cup a year ago."

The increase in sales was complemented by revenue from Azteca America--the company's wholly-owned broadcast television network focused on the U.S. Hispanic market--of Ps.258 million, 17% above the Ps.220 million a year ago, with a growing preference of advertisers to reach their target segments through the network's programming.

Programming sales to other countries were Ps.89 million in the period, from Ps.47 million from the previous year. The revenue was directly related to the export of programs to global audiences, especially outstanding were Cielo Rojo and Emperatriz, which where commercialized in Europe and Africa; as well as Lo que Callamos las Mujeres in Latin America.

Revenue from barter sales was Ps.104 million in the period, compared to Ps.82 million in the previous year.

Costs and expenses

The 2% increase in costs and expenses was the result of a 2% growth in production, programming and transmission costs --to Ps.1,428 million, from Ps.1,406 million in the same period a year ago-- and a 5% increase in selling and administrative expenses --to Ps.314 million, from Ps.299 million in the same quarter of 2010.

The costs increase is the result of the production of content that positively influenced audience share and allowed a wide number of advertisers to reach their client base directly, having an important positive effect on the revenue for the period.

Selling and administrative expense changes are the result of growing company operations.

EBITDA and net income

EBITDA was Ps.1,287 million, compared to Ps.1,101 million in the same period of the prior year; the EBITDA margin was 42% this period, compared to 39% from last year.

The most significant change below EBITDA was a Ps.237 million deterioration in the exchange result, mainly related to the devaluation of the Mexican peso this period.

Net income for the period was Ps.380 million, compared to Ps.416 million from a year ago.

Debt

As of September 30, 2011, Azteca's outstanding debt --excluding Ps.1,607 million debt due in 2069--was Ps.10,027 million.

The cash balance of the company was Ps.7,180 million, compared to Ps.3,341million a year ago. As a result, net debt was Ps.2,847 million, 36% below the Ps.4,476 million from the prior year. Debt to last twelve months (LTM) EBITDA ratio was 2.1 times, and net debt to LTM EBITDA was 0.6 times.

Nine months results

Net sales in the first nine months of the year were Ps.8,081 million, 2% above the Ps.7,887 million in the same period of 2010. Total costs and expenses were Ps.5,012 million, from Ps.4,979 million in the same period a year ago. As a result, Azteca reported EBITDA of Ps.3,069 million, 6% above the Ps.2,907 million from the prior year. The EBITDA margin for the nine months period was 38%, one percentage point above the same period of the prior year. The company recorded net income of Ps.936 million, 1% above the Ps.928 million for the same period of 2010.

9M 2010 9M 2011 Change
Ps. %
--- ---

Net sales $7,887 $8,081 $195 2%

EBITDA $2,907 $3,069 $162 6%

Net income $928 $936 $8 1%

Net income per CPO $0.31 $0.31 $0 1%

Company Profile

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. Azteca affiliates include Azteca America Network, a broadcast television network focused on the rapidly growing U.S. Hispanic market, and Azteca Web, an Internet company for North American Spanish speakers.

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: 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 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.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Millions of Mexican pesos of September 30 of 2010 and
2011 )

Third Quarter of :
-------------------
2010 2011
---- ----
Change
------

Net
revenue Ps 2,806 100% Ps 3,030 100% Ps 223 8%
--- ---

Programming,
production
and
transmission
costs 1,406 50% 1,428 47% 23 2%
Selling
and
administrative
expenses 299 11% 314 10% 15 5%

Total
costs and
expenses 1,705 61% 1,743 58% 37 2%
----- ----- ---

EBITDA 1,101 39% 1,287 42% 186 17%

Depreciation
and
amortization 133 117 (15)

Operating
profit 968 34% 1,169 39% 201 21%
--- ----- ---

Other
expense
-Net (233) (207) 26

Comprehensive
financing
result:
Interest
expense (216) (233) (16)
Other
financing
expense (24) (28) (4)
Interest
income 28 35 7
Exchange
Gain
-loss net 4 (233) (237)
(208) (459) (251)
---- ---- ----

Income
before
the
following
provision 527 19% 503 17% (24) -4%

Provision
for
income
tax (110) (123) (12)

Net income Ps 416 Ps 380 Ps (36)
=== === === === === ===

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

Controlling
share in
net
profit Ps 416 15% Ps 380 13% Ps (36) -9%
=== === === === === ===

TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Millions of Mexican pesos of September 30 of 2010 and
2011 )

Period ended September
30,
-----------------------
2010 2011
---- ----
Change
------

Net revenue Ps 7,887 100% Ps 8,081 100% Ps 195 2%
--- ---

Programming,
production
and
transmission
costs 4,115 52% 4,083 51% (33) -1%
Selling and
administrative
expenses 864 11% 930 12% 66 8%

Total costs
and
expenses 4,979 63% 5,012 62% 33 1%
----- ----- ---

EBITDA 2,907 37% 3,069 38% 162 6%

Depreciation
and
amortization 394 365 (29)

Operating
profit 2,514 32% 2,704 33% 191 8%
----- ----- ---

Other
expense
-Net (493) (419) 74

Comprehensive
financing
result:
Interest
expense (640) (639) 1
Other
financing
expense (76) (77) (1)
Interest
income 90 106 15
Exchange
Gain-
Loss -
Net 5 (222) (227)
(620) (832) (212)
---- ---- ----

Income
before the
following
provision 1,400 18% 1,453 18% 52 4%

Provision
for income
tax (471) (517) (45)

Net income Ps 929 Ps 936 Ps 7
=== === === === === ===

Non-
controlling
share in
net profit Ps 1 Ps 0 Ps (0)
=== === === === === ===

Controlling
share in
net profit Ps 928 12% Ps 936 12% Ps 8 1%
=== === === === === ===

TV AZTECA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Mexican pesos of September 30 of 2010
and 2011)

At September 30
---------------
2010 2011
---- ----
Change
------
Current assets:
Cash and cash
equivalents Ps 3,341 Ps 7,180 Ps 3,839
Accounts
receivable 4,120 6,157 2,037
Other current
assets 2,122 2,110 (12)

Total current
assets 9,583 15,447 5,864 61%

Long-term
accounts
receivable from
Pappas 1,510 2,093 583
Exhibition
rights 1,063 1,308 245
Property, plant
and equipment-
Net 3,126 3,241 115
Television
concessions-
Net 4,648 4,757 109
Other assets 1,801 1,402 (399)
Goodwill -Net - 19 19
Deferred income
tax asset 4,253 4,860 607
Total long term
assets 16,401 17,680 1,279 8%

Total assets Ps 25,984 Ps 33,127 Ps 7,143 27%
== ====== == ====== == =====

Current
liabilities:
Short-term debt Ps 1,680 Ps 556 Ps (1,124)
Other current
liabilities 2,573 2,662 89

Total current
liabilities 4,253 3,218 (1,035) -24%

Long-term debt:
Structured
Securities
Certificates 6,000 5,444 (556)
Long-term debt 137 4,027 3,890
Total long-term
debt 6,137 9,471 3,334
Other long term
liabilities:
Advertising
advances 4,039 6,182 2,143
American Tower
Corporation
(due 2069) 1,497 1,607 110
Deferred income
tax asset 3,378 3,566 188

Total other
long-term
liabilities 8,914 11,355 2,441 27%

Total
liabilities 19,304 24,044 4,740 25%

Total
stockholders'
equity 6,680 9,083 2,403 36%

Total
liabilities and
equity Ps 25,984 Ps 33,127 Ps 7,143 27%
=== ====== === ====== === =====

SOURCE Azteca

Azteca

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

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