TV Azteca weathers U.S. recession

Broadcaster reports 48% rise in net income

By JAMES YOUNG

MEXICO CITY -- Though feeling the heat from the U.S. economic downturn, Mexico's No. 2 broadcaster TV Azteca reported a 48% rise in net income to $32.2 million Tuesday, resulting from "superior" ad plans and sales from a newly consolidated channel.

The conglom posted a 9% year-to-year rise in operating income to $93 million and a 10% jump in net sales to $244 million. The figures given in the report are adjusted for inflation.

"Our sales force offered ad options designed to achieve superior impact in the target segment of each one of our clients in Mexico," said Azteca CEO Mario San Román in the report.

Nevertheless, the report also noted that its U.S. channel Azteca America is feeling the effects of the "adverse economic environment," reporting a hefty 20% loss in sales -- down to $11.6 million.

A look at a first six months of the year compared to the first half of 2007 reveals broader trends.

The time period shows only a 7% rise in net sales and a 1% drop in operating income with net income down $70.8 million year to year, which reflects a net loss of $30.1 million in the first six months of this year.

The company pointed to an extraordinary increase in taxes as well as the absorption of expenses of $23.3 million for its new channel, Proyecto 40.

Channel did start showing a positive side this quarter with sales of $5.4 million.

Azteca boasted the sales of shows "Cambio de vida," "Lo que callamos las mujeres" and "Vivir por Tí," in Central and South America, and "Bellezas indomables" in Asia and Europe. However, it also noted that foreign sales were down 28% from the second quarter of 2007 to a meager $1.8 million.

By comparison, Azteca's Mexican rival Televisa's programming exports sales came in just under $57 million in the second quarter this year.