Bold Maneuvers, Meeting Challenges (The CEO's 2013 Report) | GMANetwork.com - Corporate - Articles

The full statement of GMA Chairman and Chief Executive Officer Felipe L. Gozon at the annual stockholders' meeting.

Bold Maneuvers, Meeting Challenges (The CEO's 2013 Report)

May 22 2014


BOLD MANEUVERS, MEETING CHALLENGES
THE CEO’S 2013 REPORT
ANNUAL STOCKHOLDERS’ MEETING
21 MAY 2014

 
CUSTOMARY GREETINGS:
FELLOW DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS OF GMA NETWORK, GUESTS, 
 
LADIES AND GENTLEMEN, MAGANDANG UMAGA SA INYONG LAHAT, MGA KAPUSO!
 
AS YOU ALL KNOW BY NOW, THE FUTURE OF THE BROADCAST INDUSTRY WILL BE SHAPED BY ALL THE TECHNOLOGICAL ADVANCEMENTS HAPPENING AT A VERY FAST PACE. FORTUNATELY FOR US, WE HAVE LONG EMBRACED THE INDUSTRY’S RAPID REVOLUTION, CONSTANTLY MAKING SURE THAT WE ARE UP TO SPEED WITH THE DEVELOPMENTS. WHILE CONTENT REMAINS AS THE KING, THE CHALLENGE IS INCREASINGLY SHIFTING TO HOW WE DELIVER QUALITY CONTENT ACROSS A WIDE ARRAY OF AVAILABLE PLATFORMS.
 
THE FOCUS NOW IS SERVING THE DIVERSE NEEDS OF OUR AUDIENCES BY PROVIDING PRODUCTS AND SERVICES THAT ARE TAILOR-FIT TO THEIR UNIQUE LIFESTYLES AND WANTS. 

INDEED, IT IS TOUGH TO SYNERGIZE DIVERSITY WITH UNIQUENESS BUT THAT IS WHAT THE BROADCAST LANDSCAPE REQUIRES US TO DO NOW, AND, I BELIEVE MORE SO IN THE FUTURE.
 
WE PROVIDED TO OUR VIEWERS A HEALTHY BALANCE OF OUT-OF-THE BOX STORYLINES FOR ENTERTAINMENT AND CREDIBLE AND RELEVANT NEWS AND PUBLIC AFFAIRS PROGRAMMING. 
 
THE DARING TELESERYE, MY HUSBAND’S LOVER, MADE A MARK IN OUR LOCAL TV HISTORY BY TACKLING THE ERSTWHILE TABOO TOPIC OF HOMOSEXUALITY. WE EVEN PARLAYED THIS SUCCESS INTO A CONCERT HEADLINED BY THE TELESERYE’S MAIN STARS AND A SERIES OF MEET AND GREET TOURS BOTH HERE AND ABROAD.

WE STAMPED OUR TWIN SIGNATURES OF CREDIBILITY AND COMPREHENSIVENESS ON OUR COVERAGE OF THE MID-TERM ELECTIONS, RESULTING IN A RESOUNDING APPROVAL FROM OUR AUDIENCE, AS EVIDENCED BY THE RATINGS.
 
BECAUSE OF THE OMNIPRESENCE OF TECHNOLOGY, COMPETITION IN THE BROADCAST ARENA IS NOW 24/7. ANG KOMPETISYON, KATULAD NG BALITA, AY HINDI NATUTULOG. KUNG KAYA’T ANG BATTLE CRY NATIN DITO SA ATING NETWORK NGAYON AY “WALANG TULUGAN” AT “NAKATUTOK KAMI, 24 ORAS.”
 
OUR FOCUS REMAINED TWO-FOLD:
 
1) TO CONSTANTLY DEVELOP PROGRAMS THAT WOULD DELIGHT BOTH OUR LOCAL AND INTERNATIONAL VIEWERS; AND,
 
2) TO CONTINUE THE EXPANSION AND IMPROVEMENT OF OUR SIGNAL AND REACH IN THE ARCHIPELAGO AND THE DELIVERY OF OUR PROGRAMS TO MARKETS ABROAD.
 
TV RATINGS
 
FIRST, A QUICK GLANCE AT OUR RATINGS PERFORMANCE.
 
IN 2013, WE LOST OUR LEAD IN NATIONWIDE TV RATINGS, AFTER BEING AHEAD FOR TWO CONSECUTIVE YEARS. GMA’S 2013 NATIONWIDE AVERAGE AUDIENCE SHARE WAS BEHIND BY 2 PERCENT VERSUS ABS-CBN’S AVERAGE.
 
HOWEVER, WE MAINTAINED OUR EDGE IN OUR TRADITIONALLY STRONG AREAS OF LUZON AND MEGA MANILA. GMA’S 2013 AUDIENCE SHARE LEAD OVER ABS-CBN STOOD AT 8 PERCENT IN MEGA MANILA.

LAST YEAR, MEGA MANILA ACCOUNTED FOR 58.8 PERCENT OF TOTAL URBAN TV HOUSEHOLDS. OUR LEAD OVER ABS-CBN IN URBAN LUZON STOOD AT 5 PERCENT. URBAN LUZON ACCOUNTED FOR 76.4 PERCENT OF TOTAL URBAN TV HOUSEHOLDS IN 2013.
 
MEANWHILE, OUR OTHER FREE TV CHANNEL, GMA NEWS TV, REMAINED THE LEADING NEWS CHANNEL IN THE COUNTRY, RANKING FOURTH OVERALL.
 
OUR RADIO STATIONS DZBB-AM AND DWLS-FM REMAINED NUMBER 2 IN MEGA MANILA IN THEIR RESPECTIVE CATEGORIES.
 
SHOULD YOU NEED MORE DETAILS ABOUT OUR RATINGS PERFORMANCE, OUR FIRST VICE PRESIDENT FOR RESEARCH, MS. SHEILA TAN, IS HERE TO ADDRESS YOUR QUESTIONS LATER.
 
FINANCIALS
 
LET US DISCUSS OUR FINANCIALS…
 
DESPITE A FEW SETBACKS THAT CAME OUR WAY, WE WERE ABLE TO ACHIEVE MODEST GAINS IN OUR TOP AND BOTTOM LINES IN 2013.
 
1. GMA NETWORK’S CONSOLIDATED GROSS REVENUES SETTLED AT 12.95 BILLION PESOS – A 7 PERCENT INCREASE OVER OUR 2012 NUMBERS.
 
2. EBITDA IMPROVED BY 9 PERCENT OR 297 MILLION PESOS OVER 2012, CLOSING AT 3.7 BILLION PESOS.
 
3. TOTAL OPERATING EXPENSES WENT UP BY 8 PERCENT TO 10.57 BILLION PESOS, DUE TO HIGHER PRODUCTION COST.
 
4. CONSOLIDATED NET INCOME IN 2013 WAS AT 1.67 BILLION PESOS, UP BY 3 PERCENT VERSUS 2012.
 
OUR SENIOR VICE PRESIDENT FOR FINANCE AND ICT, MR. RONNIE MASTRILI, WILL SHARE AN ANALYSIS OF OUR FINANCIAL PERFORMANCE VIS-À-VIS OUR COMPETITOR LATER.
 
EXPANSION
 
IN THE AREA OF EXPANSION…
 
TARGETING A 100 PERCENT TV COVERAGE OF THE ENTIRE PHILIPPINE ARCHIPELAGO NECESSITATES UNCOMPROMISED SIGNAL CLARITY AND EXTENSIVE REACH. ACCORDING TO THE 2013 AGB NIELSEN TOTAL PHILIPPINE ESTABLISHMENT SURVEY, OUR COVERAGE OF THE COUNTRY’S URBAN TV HOUSEHOLDS STANDS AT 99 PERCENT, WHILE IN THE RURAL AREAS, IT IS 94 PERCENT.
 
IN 2013, WE OPENED OUR ORIGINATING STATION IN CAGAYAN DE ORO, TO SERVICE NORTHERN MINDANAO. APART FROM CDO, WE HAVE ORIGINATING STATIONS CAPABLE OF BROADCASTING THEIR OWN LOCAL CONTENT IN ILOCOS, DAGUPAN, BICOL, ILOILO, CEBU AND DAVAO.
 
SEVERAL TRANSMISSION UPGRADE PROJECTS WERE COMPLETED DURING THE YEAR AND TODAY, GMA NETWORK BROADCASTS LOUD AND CLEAR IN PUERTO PRINCESA, SORSOGON, MOUNTAIN PROVINCE, ROMBLON, ILOCOS NORTE AND PAGADIAN CITY.
 
OTHER UPGRADES THAT ARE AIMED AT IMPROVING OUR SIGNAL AND EXPANDING OUR REACH IN OTHER AREAS CONTINUE.
 
THE IMPROVEMENTS WE ARE MAKING IN THE VISAYAN AND MINDANAO REGIONS ARE IMPORTANT BECAUSE IT IS IN THESE AREAS WHERE THE RATINGS MARGINS OF ABS OVER GMA ARE THE BIGGEST.
 
OTHER BUSINESS UNITS
 
MORE GOOD NEWS FROM OUR OTHER BUSINESS UNITS…
 
OF OUR OTHER BUSINESSES, THE REVENUE GAINERS IN 2013 INCLUDED THE FOLLOWING:
 

-GMA NEWS TV, WITH A 34 PERCENT INCREASE; 

-RADIO, WITH AN 11 PERCENT GAIN;

-REGIONAL TV, WITH A 27 PERCENT HIKE; AND,

-OUR INTERNATIONAL BUSINESS, WITH A 2 PERCENT GROWTH,
BOTH IN PESO AND DOLLAR TERMS, NOTWITHSTANDING THE DECREASE IN SUBSCRIBERS BROUGHT ABOUT BY OUR CHANGE OF CARRIER IN THE MIDDLE EAST. OUR SHIFT IN CARRIER IN THE MIDDLE EAST WAS A NECESSARY STEP TO YIELD BETTER RESULTS FOR OUR BUSINESS IN THE LONGER TERM.
 
SUBSIDIARIES
 
MOVING ON TO OUR SUBSIDIARIES . . .
 
OVERALL, THE REVENUES OF GMA’S SUBSIDIARIES WENT DOWN BY 1 PERCENT IN 2013 VERSUS 2012. THE MAIN DRAG CAME FROM THE DROP IN REVENUES OF OUR GMA FILMS, WITH ONLY ONE MOVIE IN 2013.
 
GMA WORLDWIDE, OUR SYNDICATION ARM, ENDED 2013 WITH TOTAL SALES OF 1.5 MILLION DOLLARS, UP 27 PERCENT OVER 2012, SELLING PROGRAM AND MOVIE TITLES TO VARIOUS COUNTRIES.

OUR GROWING SUCCESS IN BRINGING GMA PROGRAMS TO SOUTHEAST ASIA HAS RESULTED IN THE INCREASING POPULARITY OF OUR HOME-GROWN ARTISTS SUCH AS MARIAN RIVERA, DENNIS TRILLO, DINGDONG DANTES AND OTHERS IN THESE NEIGHBORING COUNTRIES. 
 
CUMULATIVE 2013 REVENUES OF ALTA PRODUCTIONS STOOD AT 50.5 MILLION PESOS, UP BY 3 PERCENT VERSUS 2012. LIKE IN THE PAST, AUDIO DUBBING SERVICES WERE THE PRIMARY CONTRIBUTOR TO THESE REVENUES.
 
REVENUES FOR SCRIPT2010 ENDED AT 130.9 MILLION PESOS, SLIGHTLY UP VERSUS ITS 2012 NUMBERS.
 
MEANWHILE, THE ALBUM OF JULIE ANNE SAN JOSE RELEASED BY GMA RECORDS RECEIVED AN EIGHT-TIME PLATINUM RECORD AWARD IN 2013.
 
FINALLY, OUR GMA NEW MEDIA CONTINUED TO DESIGN AND DEVELOP PORTALS AND OTHER ONLINE AND MOBILE APPLICATIONS FOR OUR VARIOUS PROGRAMS AND PROJECTS.

AMONG THE NOTABLE PROJECTS COMPLETED IN 2013 WAS THE “I M READY” PORTAL WHICH IS A ONE-STOP PORTAL FOR PUBLIC SAFETY INFORMATION, INCLUDING TRAFFIC AS WELL AS DISASTER AWARENESS AND PREPAREDNESS.

THE “I M READY” APP IS NOW AVAILABLE FOR DOWNLOADING IN THE APP STORE FOR THOSE USING I-PHONES AND THE PLAY STORE FOR ANDROID.
 
CONCLUSION
 
BECAUSE THE BROADCAST INDUSTRY IS SO DYNAMIC, WE CAN EXPECT THE CURRENT YEAR TO BE MORE CHALLENGING THAN THE PREVIOUS ONE.
 
WITH THE RECENT DECISION TO ADOPT THE JAPANESE STANDARD IN DIGITAL TV TRANSMISSION, THE ADVENT OF DIGITIZATION IN OUR COUNTRY MAY BE JUST AROUND THE CORNER. THE GOOD NEWS IS THAT WE HAVE LONG BEEN PREPARING FOR THIS EVENTUALITY, SO, MUCH LIKE THE “I M READY” PORTAL, WE ARE READY FOR THE DIGITIZATION OF BROADCAST MEDIA.

WE ARE IN THE PROCESS OF EXPLORING BUSINESS MODELS TO MAXIMIZE BOTH THE TECHNOLOGICAL AND ECONOMIC POTENTIALS OF THE DIGITIZATION OF OUR BROADCASTING SERVICES.
 
OUR STOCKHOLDERS CAN BE CONFIDENT THAT YOUR NETWORK WILL NOT LAG BEHIND THESE TECHNOLOGICAL DEVELOPMENTS AS WE CONTINUE TO BUILD OUR BRAND WITH STRONG VALUES, PRINCIPLES AND PURPOSE.
 
WE WILL CONTINUE TO MOVE FORWARD AND CONFIDENTLY MEET CHALLENGES HEAD-ON WITH THE HELP OF OUR EMPLOYEES AND TALENTS, WHO ARE THE INDUSTRY’S BEST. WE BELIEVE AND EXPECT THAT OUR BUSINESS WILL CONTINUE TO GROW AND ACHIEVE NEW MILESTONES IN THE COMING YEARS.
 
LASTLY, THANK YOU, DEAR STOCKHOLDERS, FOR YOUR UNWAVERING TRUST AND SUPPORT. 
 
TO OUR DIRECTORS, OFFICERS, EMPLOYEES AND TALENTS, THANK YOU FOR YOUR VALUABLE CONTRIBUTIONS AND ASSISTANCE.
 
MARAMING SALAMAT AT MAGANDANG UMAGA, MGA KAPUSO.

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