TV Azteca Announces Sales of Ps.2,400 Million and EBITDA of Ps.1,002 Million in 3Q09

TV Azteca Announces Sales of Ps.2,400 Million and EBITDA of Ps.1,002 Million in 3Q09

-EBITDA margin grows three percentage points to 42%-

-Continued strength in Azteca America as sales grow 64% in the quarter to Ps.197 million-

MEXICO CITY, Oct. 26 /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 third quarter of 2009.

"The comparative of the results is difficult for this period, due to the transmission and marketing of the Beijing Olympic Games a year ago," said Mario San Roman, Chief Executive Officer of TV Azteca. "As a response to the absence of extraordinary income, we stimulate furthermore the contents that attract large, quality audiences and achieved double-digit reductions in total costs and expenses, which generated an additional expansion of our solid profitability margins."

Third Quarter Results

Net sales were Ps.2,400 million, compared to Ps.2,614 million in the same quarter of 2008. Total costs and expenses were Ps.1,398 million, 12% below from Ps.1,590 million in the same period of the previous year.

As a result, TV Azteca reported EBITDA of Ps.1,002 million, compared to Ps.1,024 million in the third quarter of 2008. The EBITDA margin in the period was 42%, three percentage points above the 39% of the year-ago quarter. The company registered net majority income of Ps.358 million, compared to net income of Ps.493 million a year ago.

Net Sales

"We were successful in further strengthening the popularity of our programming in Mexico, and reached a full-day commercial audience share of 40% in the quarter. This allowed us to develop high-impact advertising campaigns for numerous clients and partially compensated the sales dip from the absence of the Olympic Games of the previous year," added Mr. San Roman.

The popularity of the programming of Azteca America, the company's wholly owned broadcast television network focused on the U.S. Hispanic market, also grew significantly in the quarter, as primetime audience share for individuals 18-49(1) rose 54%.

TV Azteca reported sales from Azteca America of Ps.197 million, 64% higher than the Ps.120 million a year ago.

Third quarter revenue includes sales of Ps.41 million from Proyecto 40-UHF channel with pluralistic content in Mexico -- compared to Ps.36 million in the same period of the prior year.

Revenue from barter sales was Ps.63 million, compared to Ps.87 million from the previous year.

Costs and Expenses

Total costs and expenses decreased 12% as a result of a 13% reduction in programming, production and transmission costs -- to Ps.1,130 million, from Ps.1,298 million in the same period a year ago -- and an 8% reduction in selling and administrative expenses to Ps.268 million, from Ps.292 million, in the same quarter of 2008.

1) Source: The Nielsen Company NPM. 3Q 2008-3Q 2009 (broadcast weeks) Monday-Friday day part averages, 7 pm to 11 pm, live impressions total 18-49.

The decrease in costs is principally due to the absence of exhibition rights and production costs related to last year's Olympic Games, as well as of efforts to further increase production efficiency.

Decreases in selling and administrative expenses were the result of reductions in personnel, travel, services and advisory expenses, due to initiatives that allow to effectively control outlays.

EBITDA and Net Income

EBITDA was Ps.1,002 million, compared to Ps.1,024 million in the same period of the prior year.

The main change below EBITDA was a Ps.96 million increase in the integrated finance cost, due to a Ps.135 million deterioration in the foreign exchange result. Net majority income of the quarter was Ps.358 million, compared to net income of Ps.493 million a year ago.

Debt

As of September 30, 2009, TV Azteca's outstanding debt -- excluding Ps.1,617 million debt due 2069 -- was Ps.7,147 million; this last figure is peso denominated.

The cash balance was Ps.2,558 million, which resulted in net debt of Ps.4,589 million. Debt to last twelve months (LTM) EBITDA ratio was 1.8 times, and net debt to LTM EBITDA was 1.2 times.

Nine Months Results

Net sales in the first nine months of the year were Ps.6,871 million, compared to Ps.6,906 million for the same period of 2008. Total costs and expenses were Ps.4,319 million, 2% below the Ps.4,415 million for the same period a year ago. As a result, TV Azteca recorded EBITDA of Ps.2,552 million, 2% higher than Ps.2,491 million in the first nine months of the prior year. The EBITDA margin of the nine-month period was 37%, from 36% a year ago. The company recorded majority net income of Ps.451 million, 137% higher than Ps.191 million in the same period of 2008, mainly as a result of extraordinary deferred income taxes a year ago.

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, as well as Proyecto 40 in UHF. 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.

   (Financial tables follow)    Investor Relations:   Bruno Rangel   + 52 (55) 1720 9167   jrangelk@tvazteca.com.mx    Fernanda Gonzalez-Rul   + 52 (55) 1720 0041   fgrul@tvazteca.com.mx    Press Relations:   Tristan Canales   + 52 (55) 1720 1441   tcanales@gruposalinas.com.mx    Daniel McCosh   + 52 (55) 1720 0059   dmccosh@tvazteca.com.mx  

First Call Analyst:
FCMN Contact:

Source: TV Azteca, S.A. de C.V.

CONTACT: Investor Relations, Bruno Rangel, +011-52-55-1720-9167,
jrangelk@tvazteca.com.mx, or Fernanda Gonzalez-Rul, +011-52-55-1720-0041,
fgrul@tvazteca.com.mx; or Press Relations, Tristan Canales,
+011-52-55-1720-1441, tcanales@gruposalinas.com.mx, or Daniel McCosh,
+011-52--55-1720-0059, dmccosh@tvazteca.com.mx

Web site: http://www.tvazteca.com.mx/

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Profile: International Entertainment