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MEXICO CITY (Reuters) – Grupo Televisa reported a more than 95% slide in quarterly net profit on Tuesday as the broadcaster’s income from its joint venture with Univision slipped and satellite TV unit Sky saw increased disconnections.
Profit only reached 133.5 million pesos ($7.8 million) in the second quarter, a sharp drop from the 3.14 billion peso profit seen in the year-ago quarter.
Earnings per share came in at 5 peso cents a share, missing the Refinitiv estimate of 25 peso cents per share.
The company’s revenue remained relatively stable at 18.5 billion pesos, also missing the estimate of 18.8 billion pesos from analysts polled by Refinitiv.
TelevisaUnivision, a firm that combines content with U.S. broadcaster Univision, saw net income drop in the first half of the year, Televisa said in a statement.
TelevisaUnivision has rolled out a subscription-based streaming platform, ViX+, which has aimed to compete with established rivals such as Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN)’s Prime Video.
The Mexican firm also saw a dilution gain in the year-ago quarter when a JV stockholder converted preferred shares into common shares, Televisa added, as well as a gain on the reversal of an impairment loss.
The three factors caused the share of income from the joint venture to show a fall by 4.19 billion pesos, Televisa said.
Televisa also said its satellite TV service Sky saw 191,000 net disconnections of revenue-generating units (RGUs) in the quarter, driven by the loss of 164,100 video RGUs.
The broadcaster “could continue to see constant challenges in Sky through the end of 2023,” analysts at brokerage Monex wrote, though an expected slowing in inflation could lighten the load.
Expenses, not including regular corporate expenses and depreciation and amortization, also more than quadrupled in the quarter, partially due to severance payments after lay-offs at Sky and in Televisa’s cable unit, it said.
The firm’s cable unit saw more than 5,000 net RGU disconnections in the quarter due to churn from expiring promotions and April price increases, Televisa said.
Televisa was the top loser on Mexico’s Banamex-30 stock index on Tuesday ahead of the release of the results, closing down nearly 3.5%.
($1 = 17.1156 pesos at end-June)
