Olympics help Azteca to golden ad revs
Net announced it will issue $391 million in debt
Net, which generated record advertising sales of 2.22 billion pesos ($191 million) for the period -- a 23% rise from a year earlier -- earned $36 million, compared to $30 million in the third quarter of 2003.
Azteca also announced that it will issue $391 million in debt. The issue will provide the net with ready cash and, along with the favorable earnings, could spark renewed interested from investors. Azteca stock has suffered since news of impending Securities and Exchange Commission charges come out earlier this month.
Both the SEC and Mexico's National Banking and Securities Commission have been investigating a questionable 2003 debt refinancing involving telco Unefon, which is partially owned by Azteca.
Earlier this month the SEC notified four Azteca executives that it would likely press civil charges.
"The report was good, above expectations," analyst Jose Luis Ramirez of Deutsche-Ixe told Reuters, "but it has the SEC problem pending."
In the debt filing, Azteca acknowledged the possibility that the SEC "may impose penalties that could have a material adverse effect on its financial condition and the results of its operations."
Without doubt, the key spur to the earnings growth was the Olympic Games, which alone added $19.3 million to Azteca's top line.
Azteca America made a smaller, but encouraging, impact. The U.S.-based net saw ad sales grow 74% to $8.1 million from $4.7 million.
Azteca did report a big rise in operating costs, up a quarter to $86 million from $65 million. But the net attributed it to increased production -- 2,211 hours compared to 2,039 hours a year earlier -- to meet audience demand in the U.S. and Mexico. "As a result of the new shows, we have captured growing advertising opportunities in the two expanding markets," Azteca CEO Carlos Hesles said.
Finally, Azteca said that its board had approved $210 million in cash distributions to stockholders before year's end.
