2006 Annual Report - Lopez Holdings Corporation

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coMMunicAtions
Media
In 2006, ABS-CBN Broadcasting Corporation (ABS-
CBN) made significant headway in recovering its audience
share in Mega Manila, while maintaining its television
ratings dominance in the rest of the country. Creative
programming decisions allowed for higher revenues
from non-traditional advertisements such as product
intrusions and product placements. Ticket sales for four
of the nine movies ABS-CBN subsidiary Star Cinema
produced in 2006 breached the P100 million blockbuster
mark. Meanwhile, costs were kept under control, even as
ABS-CBN Global continued to expand.
ABS-CBN’s 2006 gross revenues inched up by 2%
to ∏17.39 billion, from ∏17.05 billion the year before.
International operations continued to be strong, while
airtime revenues also grew by 3% to ∏10.66 billion from
∏10.33 billion in 2005. Combined sale of services and
sale of goods improved by 10% to ∏5.61 billion from
∏5.09 billion, led by ABS-CBN Global which saw its total
international subscriber base growing by 21% YoY. This
translates to 1.6 million viewers worldwide by end-2006.
Total expenses decreased by 4% to ∏15.98 billion from
∏16.62 billion. Cash operating expenses were flat at
∏13.65 billion compared to P13.59 billion while non-cash
operating expenses declined by 14% to ∏2.075 billion
from ∏2.407 billion.
Operating income rose by 58% to ∏1.66 billion and
net income jumped 194% to ∏743 million. EBITDA
ABS-CBN’s Wowowee draws Filipinos together from all over the world.
Pinoy Big Brother Season Two and other reality TV Shows offer innovative
ways to promote products and services.
(earnings before interest, taxes, depreciation and
amortization) was 19% higher at ∏4.188 billion with
EBITDA margin at 24% versus 21% the prior year.
ABS-CBN established the 71 Dreams
Foundation to facilitate the provision of holistic
assistance to families affected by the Ultra
stampede. 71 Dreams aims to ensure that
financial and other forms of assistance provided
will lead to long-term benefits for each family.
The foundation, with the cooperation of the
affected families themselves, identified their
exact needs of as to education, employment,
food, housing, medical assistance and livelihood.
It is working with concerned individuals—many
of them ABS-CBN artists—and corporations, as
well as partner non-government organizations to
fulfill the express requirements.
Abs-cbn packs the year with
shows for the whole family
As ABS-CBN worked to narrow the TV ratings gap, it re-
balanced its programming grid to ensure it will have something for
every member of the family.
Viewers responded well to its back to basics tack offering all-
new, original productions that showcased the ABS-CBN brand of
kapamilya values and caring for our fellowmen. Its fantasy series
Super Inggo and Komiks Presents: Da Adventures of Pedro
Penduko were especially liked for the strong family values promoted
in the show and not usually seen in other shows of the same genre.
ABS-CBN turned well-loved movies into successful TV series
known as sine-seryes, a strategy now being copied by other TV
stations. But it was ABS-CBN that started it all with Bituing Walang
Ningning and Maging Sino Ka Man. In addition, ABS-CBN revived
Gulong ng Palad, the most highly-rated soap of the 1970s, with
much success, further reinforcing the network’s dominance of the
drama genre that was clearly seen by the solid following garnered
by Sa Piling Mo.
ABS-CBN followed up 2005’s groundbreaking reality TV
show, Pinoy Big Brother, with Celebrity and Teen editions, and
the engaging singing and performance competition Pinoy Dream
Academy from which emerged new talents and stars.
Most notable among ABS-CBN’s 2006 successes was the
game show Kapamilya, Deal or No Deal, which was originally
meant to run for only 13 weeks, but was extended well into the first
quarter of 2007 due to insistent public demand. A joint venture with
Dutch content provider Endemol, which also owns the Big Brother
franchise, Kapamilya, Deal or No Deal is an exciting, tension-filled
show where a contestant can win amounts from one peso up to P2
million by choosing one of 26 briefcases, which can be bought for a
smaller or bigger amount by an anonymous Banker.
Finally, ABS-CBN Sports dominated the field with The Battle,
the Pacquiao-Morales boxing rematch in January 2006 which
garnered TV ratings of 59%, and The Grand Finale, the third and
final Pacquiao-Morales fight in November 2006 which registered
ratings of 55%.
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