STI Education Systems says operating expenses pared its net income

STI Education Systems Holdings Inc. on Tuesday reported a drop in its net income during the academic year 2017-2018, despite having breached the P3-billion revenue mark.

In a regulatory filing on Tuesday, STI said its net income slipped to P502.8 million from P558.4 million given the “substantial” increase in operational expenses.

Interest expense on loans—incurred by the STI Education Services Group’s (STI ESG) bond issue—increased by 177 percent.

Gross revenue grew by 5 percent to P3.08 billion from P2.93 billion.

Gross profit expanded by P80.5 million to P2.07 billion from P1.99 billion

STI Holdings follows an April-to-March fiscal year, mirroring the academic cycle in the Philippines as the bulk of its income is derived from education services.

“STI Holdings ... attributes the revenue growth to the steady increase in the number of enrollees in STI ESG owned and franchised schools, as well as in iACADEMY and STI WNU,” the company said.

STI ESG caters to the Senior High School (SHS) program, while iACADEMY provides niche courses in the computing, business, and design.

STI West Negros University (WNU) is the company’s educational system in Bacolod City.

For the school year 2017-2018, STI said 105,031 students enrolled in schools within its network—compared with 103,727 during the previous school year. —Jon Viktor Cabuenas/VDS, GMA News

Due to losses, ABS-CBN gives up mobile business

Media giant ABS-CBN Corp.’s cellular business, which has struggled financially, will soon end its services after a five-year run.

This came as ABS-CBN announced on Monday that a network sharing agreement between subsidiary ABS-CBN Convergence and Globe Telecom would not be renewed. The five-year agreement was sealed in 2013 and was supposed to be up for renewal in June this year.

“After a thorough assessment, ABS-CBN Convergence deemed its current mobile business model to be financially unsustainable,” ABS-CBN said in a stock exchange filing on Monday.

ABS-CBN said it was seeking the approval of the National Telecommunications Commission on when its mobile service would formally end.

Until then, ABS-CBNmobile prepaid, postpaid and Sky Mobi subscribers would continue to enjoy text, call and data services, the company noted.

ABS-CBNmobile had almost one million subscribers as of late 2017, a figure little-changed from its 2016 subscriber base. ABS-CBN officials had said the company needed around two million subscribers to hit the so-called break even point.

ABS-CBNmobile operated as a mobile virtual network operator, meaning it provided wireless services without owning the infrastructure. Instead, the deal with Globe allowed it to use the latter’s nationwide network for a fee.

ABS-CBNmobile used strategy that relied heavily on ABS-CBN’s mainstream media content through the iWant TV app.

Despite positive signs early on, coupled with ABS-CBN’s aggressive multipronged initiatives in the digital space, it decided the business no longer made sense given mounting losses.

The mobile unit saw losses of almost P600 million in 2016. That loss was reportedly similar in 2017. Those figures, however, represented a small slice of ABS-CBN’s overall business, which generated revenues of P40.7 billion and a profit of P3.16 billion last year.

ABS-CBN said it would pursue other areas of cooperation with Globe.

“ABS-CBN and Globe are exploring new ways and synergies that complement their business models,” it said.

“Leveraging on ABS-CBN’s expertise as top content provider to the Filipino audience and the vast reach of Globe as the leading telecommunications company, both companies have decided to shift their focus in maximizing synergies,” it added.



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ABS-CBNmobile ends Globe network sharing

ABS-CBN Corp. has severed network sharing ties with Globe Telecom, Inc. for its ABS-CBNmobile brand after its five-year agreement expired.

In a disclosure to the stock exchange on Monday, ABS-CBN said the financial status of its mobile business was the reason for the decision.

“After a thorough assessment, ABS-CBN Convergence deemed its current mobile business model to be financially unsustainable. As a result, ABS-CBN Convergence and Globe reached an agreement not to renew their mobile network sharing agreement and to look at more profitable opportunities in the content business,” it said.

With the termination of the contract, the Lopez-led company said its prepaid, postpaid and Sky Mobi subscribers may keep availing their services “until the final date that will be approved by the National Telecommunications Commission.”

ABS-CBN Chief Finance Officer Aldrin M. Cerrado said in April the company has “contained” its losses from the ABS-CBNmobile business in 2017. During the first quarter, the company saw its interconnection costs down 64% to P49 million from P81 million in the same period last year.

ABS-CBN signed a network sharing agreement with Globe in May 2013 to receive capacity and coverage from the telecommunication giant’s cellular network. “The parties may also share assets such as servers, towers, and switches,” it said in a regulatory filing.

Despite the decision to discontinue ABS-CBNmobile, the two companies have agreed to keep connections for the TVplus boxes, Kapamilya Box Office and iWant TV offers of ABS-CBN.

“ABS-CBN and Globe are exploring new ways and synergies that complement their business models,” the company said.

Mr. Cerrado previously said the direction of ABS-CBN this year is to focus on its digital terrestrial television (DTT) business, broadband services through Sky Broadband, direct-to-home (DTH) business and international markets.

In a statement in early July, ABS-CBN said it has sold five million digital boxes nationwide in May from when it was launched in February 2015, inching closer to its goal of selling six million units by the end of the year.

ABS-CBN posted a 7% increase in attributable net income at P452.53 million during the first quarter. It was driven by lower gross expenses tempering the decline in advertising revenues.

Shares in ABS-CBN gained 55 centavos or 2.25% to close at P24.95 apiece on Monday. — Denise A. Valdez

http://bworldonline.com/abs-cbnmobile-ends-globe-network-sharing/

ABS-CBN cuts ties with Globe on mobile network sharing

ABS-CBN Convergence, the broadcast giant’s mobile telecommunications unit, is not renewing its network sharing agreement with Globe Telecom as the partnership is set to expire this year.

In a disclosure to the Philippine Stock Exchange, ABS-CBN said it previously signed a five-year agreement with Globe to deliver content and telecommunications services on mobile devices through its ABS-CBNmobile brand.

“After a thorough assessment, deemed its current mobile business model to be financially unsustainable,” the company said.

“As a result, ABS-CBN Convergence and Globe reached an agreement not to renew their mobile network sharing agreement and to look at more profitable opportunities in the content business,” it added.
ABS-CBN and Globe said they are exploring new ways and synergies that would complement their business models.

Leveraging on ABS-CBN’s expertise as top content provider to the Filipino audience and the vast reach of Globe as a leading telecommunications company, both companies have decided to shift their focus in maximizing synergies.

Among these product synergies are the promotional bundling of ABS-CBN TVplus boxes with Globe At Home prepaid WiFi and the availability of ABS-CBN TVplus’ KBO (Kapamilya Box Office) and iWant TV over-the-top services to all Globe subscribers, which are already commercially available.

Meanwhile, the company said all ABS-CBNmobile prepaid, postpaid and Sky Mobi subscribers will continue to enjoy text, call and data services until the final date that will be approved by the National Telecommunications Commission (NTC).

In November, ABS-CBN chief financial officer Aldrin Cerrado said the company in reviewing its mobile business strategy, in a bid to trim down the losses of ABS-CBNmobile.

“The direction is to have a mobile strategy in order to maximize the revenue potential of our content in many platform as possible including the mobile platform,” Cerrado earlier said.

In the first quarter of the year, ABS-CBN reported a 31 percent increase in net income to P411 million from P314 million in the same period last year.

This was despite a 5.9 percent decline in revenues to P9.01 billion from P9.58 billion in the same period a year ago.

Advertising revenue, in particular, slid by 10.2 percent to P4.35 billion as of end-March from P4.84 billion last year due to fewer advertising placements this year.

Consumer sales decreased by 1.5 percent to P4.67 billion in the first quarter from P4.74 billion a year ago due to lower theatrical receipts from global business and ABS-CBN Films, as well as lower revenue from Sky Cable’s business.