MEXICO CITY — TV Azteca execs have blamed the weak peso for a 65% drop in net profit for the first quarter of 2003 to 75 million pesos ($7 million) compared with $20 million for the same period last year.
During the last 12 months, the peso has fallen 19% compared with the greenback, hitting Mexican companies, such as the country’s second-largest broadcaster, with dollar-denominated debt.
The plummeting bottom line came despite a slight increase in first-quarter sales, up 2% compared with the 2002 period, to $127 million in a relatively tough ad market.
That increase was attributed to sales of TV Azteca’s stage-school reality hit “La Academia,” which has been bought across Latin America and Asia, as well as of two novelas in the former region, “La Duda” (The Doubt) and “Enamorate” (Fall in Love!).
Administration and selling costs also rose 9% at TV Azteca, normally regarded as much more streamlined than larger rival Televisa. This reflected the increased amount of travel of TV Azteca’s growing international sales team, the broadcaster said in a statement.
One Azteca exec told Daily Variety that the company expected to continue its low single-digit growth throughout 2003.
Merrill Lynch also approvingly noted that TV Azteca did not appear to have made any loans to prop up sister mobile telco Unefon during the quarter, previously a source of disquiet among Azteca shareholders.