TV Azteca Announces 12% EBITDA Growth to Historical Maximum of Ps.1,570 Million in 4Q09

MEXICO CITY, Feb. 25 /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 financial results for the fourth quarter and yearly results for 2009.

"We were capable of further strengthening our successful full-day programming, which attracted large quality audiences and helped increase income," commented Mario San Roman, Chief Executive Officer of TV Azteca. "The increased sales were combined with strategies of solid costs and expenses control, which resulted in the highest level of fourth-quarter EBITDA in our company's history."

"For 2009, we were able to increase commercial audience share to 40%, we obtained a historic sales record, and expanded EBITDA margin a full percentage point," added Mr. San Roman.

Fourth Quarter Results

Net sales were Ps.3,097 million, 6% above the Ps.2,909 million of the same quarter of 2008. Total costs and expenses were Ps.1,527 million, compared to Ps.1,508 million in the same period of the previous year.  

As a result, TV Azteca reported EBITDA of Ps.1,570 million, 12% superior to Ps.1,401 million in the fourth quarter of 2008.  The EBITDA margin in the period was 51%, three percentage points above the 48% of the year-ago quarter.  The company registered net majority income of Ps.949 million, 10% higher than the Ps.863 million a year ago.  

    
    
    ---------------------------------------------------------------------
                               4Q 2008      4Q 2009            Change
                                                           Ps.         %
    ---------------------------------------------------------------------
    
    Net Sales                   $2,909       $3,097       $188         6%
    
    EBITDA                      $1,401       $1,570       $169        12%
    
    Net Majority Income           $863         $949        $86        10%
    
    Net Income per CPO           $0.30        $0.32      $0.02        10%
    ---------------------------------------------------------------------
       Figures in millions of pesos.
       EBITDA: Operating Profit Before Depreciation and Amortization. 
       The number of CPOs outstanding as of December 31, 2008 was 2,916
        million and as of December 31, 2009 was 2,922 million.

Net Sales

"The popularity of our programming in Mexico grew in all day parts during the quarter, which translated to a full-day commercial audience share of 41%, two percentage points above that of the previous year," said San Roman. "A very wide range of brands were able to target their markets with our successful content, which stimulated advertising and sales."

The fourth quarter revenue includes sales from Azteca America -- the company's wholly owned broadcast television network focused on the U.S. Hispanic market -- of Ps.221 million this period, 14% higher than the Ps.194 million from last year.

Revenue from barter sales was Ps.85 million, compared to Ps.112 million from the previous year.

Costs and Expenses

The 1% growth in total costs and expenses resulted from an increase of 1% in production, programming and transmission costs -- to Ps.1,234 million, from Ps.1,219 million in the same period of the previous year -- and from a 2% increase in sales and administrative expenses -- to Ps.293 million, from Ps.288 million in the same quarter of 2008.

The relative cost stability is principally a result of strategies to further increase the efficiency of content production. The increased efficiency is especially noteworthy since it was accompanied by increases in audience levels.

The performance of sales and administration expenses resulted from higher consultant and travel expenses, partially compensated by reductions in personnel, services and operation expenses.

EBITDA and Net Income

EBITDA was Ps.1,570 million, 12% superior to Ps.1,401 million in the same period of the prior year.

The main changes below EBITDA were i) a Ps.94 million reduction of other expenses and ii) a Ps.242 million increase in tax provision from a positive fiscal balance from one year ago.

Net majority income for the period was Ps.949 million, 10% higher than the Ps.863 million a year ago.  

The company anticipates that the recent income tax law changes, referent to fiscal consolidation, will not have material effects on its income statement.

Advertising Advances

The balance of advertising advances as of December 31, 2009 was Ps.4,605 million, compared to Ps.3,971 million in the prior year.

The company considers that growth in advertising advances reflects a growing success in its programming and represents a vote of client confidence regarding the effectiveness of TV Azteca content to reach target markets.  

Debt

As of December 31, 2009, TV Azteca's debt -- excluding Ps.1,564  million of debt due in 2069 -- was Ps.7,607 million, 5% lower than the Ps.8,044 million a year ago.

The cash balance was Ps.3,594 million, which resulted in net debt of Ps.4,013 million.  Debt to last twelve months (LTM) EBITDA ratio was 1.8 times, and net debt to LTM EBITDA was one time.

Twelve Months Results

Net sales for the full year were Ps.9,968 million, 2% above the Ps.9,815 million of the same period of 2008. Total costs and expenses were Ps.5,845 million, 1% below the Ps.5,923 million in the same period a year ago. As a result, TV Azteca recorded EBITDA of Ps.4,122 million, 6% higher than Ps.3,893 million in 2008.  EBITDA margin for 2009 was 41%, one percentage point above that of the previous year. The company recorded majority net income of Ps.1,401 million, 33% higher than the Ps.1,054 million of 2008

    
    
    ---------------------------------------------------------------------
                                  2008         2009            Change
                                                           Ps.         %
    ---------------------------------------------------------------------
    Net Sales                   $9,815       $9,968       $153         2%
    
    EBITDA                      $3,893       $4,122       $230         6%
    
    Net Majority Result         $1,054       $1,401       $347        33%
    
    Net Result per CPO           $0.36        $0.48      $0.12        33%
    
       Figures in millions of pesos.
       EBITDA: Operating Profit Before Depreciation and Amortization. 
       The number of CPOs outstanding as of December 31, 2008 was 2,916
       million and as of December 31, 2009 was 2,922 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 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.

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

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