Despite GMA Network’s dominance in the television ratings game, bilyonaryo Felipe Gozon and his management team could not shield it from the negative effects of escalating prices.
GMA reported that its profit tanked by 52 percent, or P2.6 billion year on year, dropping to P2.5 billion in the first nine months of the year. Its net income margin shrank to 18 percent from 31 percent a year ago.
Advertising revenues nosedived by 20 percent, or P3.1 billion, reaching P12.7 billion from January to September.
“Household spending, one of the biggest contributors and key drivers of growth in the local economy, has weakened amid elevated inflation and rising borrowing costs. As a result, major fast-moving consumer goods clients of the company, which largely bank on individual purchasing power, have likewise scaled down their ad spending,” said GMA.
Management said it “made a deliberate effort to control expenses” this year amid the dearth in advertising.
While it succeeded in reducing personnel costs by P59 million by offering its hard-working staff a lower midyear bonus, its production costs still rose by eight percent, or P424 million, to P5.8 billion in the first nine months.
GMA increased its amortization of program rights by 40 percent, or P256 million, to P888 million due to “increased expenses related to rented programs for Ch-7 offerings, Good TV, and the DTT channels.
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