Televisa Reports Net Loss in Q3 Due to Decline in Revenues

Introduction

Mexico’s largest broadcaster, Televisa, has announced a 4.9% decrease in third-quarter revenues, resulting in a net loss for the company. This decline was primarily driven by the underperformance of its satellite television unit, SKY. Despite predictions of further troubles for its cable and satellite divisions, Televisa’s share price suffered last week. The company reported a net loss of 918.5 million pesos ($52.7 million), compared to a profit of 1.12 billion pesos in the same period last year.

Revenue and Forecast

Televisa’s third-quarter revenues fell to 18.32 billion pesos, slightly missing the average forecast of 18.36 billion pesos by four analysts. Operating profits also experienced an 8.8% decrease. SKY, the satellite television unit, witnessed approximately 232,000 disconnections and a revenue decline of 13.8%. Additionally, Televisa’s cable segment faced 737,000 disconnections among broadband and video subscribers, resulting in a revenue drop of 2.0%. To counteract these challenges, the company plans to implement a staff reduction plan, which is expected to save around 12% of their payroll starting in the fourth quarter of 2023.

Analyst’s Perspective

J.P. Morgan described Televisa’s results for the quarter as “very weak.” The bank noted that corporate expenses were a significant factor in these results, primarily due to severance costs in the cable division. Televisa had previously incurred substantial losses, but managed to make a slight comeback into profitability in the second quarter. However, this decline prompted the company to reduce its spending forecasts for this year to $620 million.

Joint Ventures and Future Plans

Despite the overall decline in revenues, Televisa’s participation in net profits from joint ventures increased by 2.3% to 588.8 million pesos. This growth was driven by higher net income from TelevisaUnivision, which recently launched the streaming service ViX+. The company aims to compete with established rivals such as Netflix and Amazon’s Prime Video. Televisa envisions profitability for ViX+ by the second half of 2024.

Conclusion

Televisa’s net loss in the third quarter reflects the challenges faced by its satellite and cable divisions. However, the company remains optimistic about its joint ventures and future plans. By implementing a staff reduction plan and focusing on its streaming service, Televisa aims to overcome these obstacles and regain profitability in the coming years.