Televisa looks for opportunities in U.S.
Posted: Friday, April 20, 2007
MEXICO CITY (AP) -- Mexico's Televisa, the world's biggest producer of Spanish-language television programming, is looking to invest in new opportunities in the growing U.S. Hispanic market, company executives said Thursday.
The investments will draw on profits the media conglomerate made from the sale of the company's 11 percent stake in the U.S. Spanish-language broadcaster Univision Communications Inc., said Televisa Executive Vice President Alfonso de Angoitia and Jose Antonio Baston, the head of its broadcast division.
Grupo Televisa SA, Mexico's largest media company, also will expand its new gaming business, from the 4,200 electronic lottery terminals now operating in stores throughout Mexico to 10,000 by year's end.
"As opportunities come up, especially in the Hispanic U.S. market, we would like to be able to take advantage of them," de Angoitia said in a conference call to discuss the company's first-quarter results. "We would like to maintain a strong cash balance for that purpose."
At the end of the first quarter, Televisa had a consolidated net cash position of 11.8 billion pesos ($1.1 billion) compared with a consolidated net debt of 1.2 billion pesos ($109 million).
Televisa sold its stake in Univision in March for $1.1 billion after investor group Broadcasting Media Partners Inc. purchased the U.S. company.
The company's net profit fell 46 percent in the first quarter to 733.6 million pesos ($66.5 million), largely because of the one-time, non-cash charge related to the Univision sale. Overall sales rose 5.9 percent despite a year-on-year decline in broadcast advertising revenue, and operating profit was 4.4 percent higher, Televisa reported Wednesday.
Televisa and Univision have clashed recently, with the Mexican broadcaster trying to get out of an agreement to provide content -- including its wildly popular soap operas -- to Univision until 2017. There are still several lawsuits pending between the two companies.
Still, Televisa has not ruled out reinvesting in the U.S. company.
"There will be many opportunities in the U.S. going forward. It's not Univision only," De Angoitia replied when asked about it.
The company also has been eyeing the planned sale by Spain's Telefonica of its stake in Dutch television production concern Endemol, and the sale of Mexican satellite operator Satelites Mexicanos, or SatMex.
De Angoitia said he could not say precisely how long Televisa would explore investments before deciding to pay out more dividends or repurchase additional stock, but estimated that it would be at least a year or more.
The company already plans to make a total dividend payout -- including an extraordinary dividend -- of 4.4 billion pesos ($400 million) on May 31 as a result of the sale. Televisa also has bought back about $300 million worth of stock in the past year, Angoitia said.
He noted that the company also expects to see additional growth in the company's gaming business but said sales "will take time to ramp up."
"We're very happy with the current operation and also with the prospects," Angoitia said.
He said the company aims to have 15 bingo parlors operating by year's end, up from five.
The company also seeks to expand in China, transmitting more of its programs there and providing programming to Chinese nationals living in Mexico, Baston said.
Company representatives plan to visit China in a few weeks, he said.
"We feel that it is a very important step to have ... a bigger presence in their country," he said.
In Mexico, Televisa and TV Azteca control roughly 70 percent and 30 percent of the television market, respectively.
The investments will draw on profits the media conglomerate made from the sale of the company's 11 percent stake in the U.S. Spanish-language broadcaster Univision Communications Inc., said Televisa Executive Vice President Alfonso de Angoitia and Jose Antonio Baston, the head of its broadcast division.
Grupo Televisa SA, Mexico's largest media company, also will expand its new gaming business, from the 4,200 electronic lottery terminals now operating in stores throughout Mexico to 10,000 by year's end.
"As opportunities come up, especially in the Hispanic U.S. market, we would like to be able to take advantage of them," de Angoitia said in a conference call to discuss the company's first-quarter results. "We would like to maintain a strong cash balance for that purpose."
At the end of the first quarter, Televisa had a consolidated net cash position of 11.8 billion pesos ($1.1 billion) compared with a consolidated net debt of 1.2 billion pesos ($109 million).
Televisa sold its stake in Univision in March for $1.1 billion after investor group Broadcasting Media Partners Inc. purchased the U.S. company.
The company's net profit fell 46 percent in the first quarter to 733.6 million pesos ($66.5 million), largely because of the one-time, non-cash charge related to the Univision sale. Overall sales rose 5.9 percent despite a year-on-year decline in broadcast advertising revenue, and operating profit was 4.4 percent higher, Televisa reported Wednesday.
Televisa and Univision have clashed recently, with the Mexican broadcaster trying to get out of an agreement to provide content -- including its wildly popular soap operas -- to Univision until 2017. There are still several lawsuits pending between the two companies.
Still, Televisa has not ruled out reinvesting in the U.S. company.
"There will be many opportunities in the U.S. going forward. It's not Univision only," De Angoitia replied when asked about it.
The company also has been eyeing the planned sale by Spain's Telefonica of its stake in Dutch television production concern Endemol, and the sale of Mexican satellite operator Satelites Mexicanos, or SatMex.
De Angoitia said he could not say precisely how long Televisa would explore investments before deciding to pay out more dividends or repurchase additional stock, but estimated that it would be at least a year or more.
The company already plans to make a total dividend payout -- including an extraordinary dividend -- of 4.4 billion pesos ($400 million) on May 31 as a result of the sale. Televisa also has bought back about $300 million worth of stock in the past year, Angoitia said.
He noted that the company also expects to see additional growth in the company's gaming business but said sales "will take time to ramp up."
"We're very happy with the current operation and also with the prospects," Angoitia said.
He said the company aims to have 15 bingo parlors operating by year's end, up from five.
The company also seeks to expand in China, transmitting more of its programs there and providing programming to Chinese nationals living in Mexico, Baston said.
Company representatives plan to visit China in a few weeks, he said.
"We feel that it is a very important step to have ... a bigger presence in their country," he said.
In Mexico, Televisa and TV Azteca control roughly 70 percent and 30 percent of the television market, respectively.
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