Updates with quotes, background on earnings, new company
MEXICO CITY, April 23 (Reuters) - Mexico's largest broadcaster Grupo Televisa TLVACPO.MX said on Friday the deal to create a new combined company with U.S. broadcaster Univision had been "very well received" and shareholders were already seeing the upside.
The announcement earlier this month of a new Spanish language media company, known as Televisa Univision, had led to a value creation of almost $2 billion for Televisa shareholders, said Co-Chief Executive Alfonso de Angoitia on a call following the company's first quarter earnings report.
"The deal has been very well received already, and we look forward to closing the transaction later in 2021," he said.
Televisa trimmed losses to 584 million pesos ($29 million) in the first quarter, driven by profit from partnerships and reduced financial expenses. That compared to a net loss of 9.7 billion pesos in the same period last year.
The company posted quarterly revenue of 23.83 billion pesos, up 2.6% year-on-year. Advertising sales increased 28.1% to 3.37 billion pesos.
De Angoitia said he was confident Televisa's operating performance would remain solid in 2021 as the Mexican economy improves and coronavirus vaccinations advance.
"Private consumption is estimated to increase by 4.2% in 2021, after a decline of 10.5% in 2020 due to the pandemic, setting a solid ground for growth in demand for our services across all segments," he said.
Capital expenditure for Televisa's cable segment, which posted year-on-year growth of 7.9%, was expected at about $850 million in 2021, company officials said.
Televisa and Univision plan to merge content by creating Televisa Univision, which will launch a global streaming platform to take on rivals including Netflix Inc NFLX.O and Disney Plus DIS.N.
That will include soap operas known as "telenovelas," sports, reality programs and other content, officials said.
Televisa will remain the largest shareholder in Televisa Univision with a 45% equity stake. It will continue to own and operate izzi Telecom, Sky Mexico, and other businesses, as well as its main real estate production facilities, the broadcasting licenses and transmission infrastructure in Mexico.
(Reporting by Cassandra Garrison and Abraham Gonzalez; Editing by Kirsten Donovan)
((Cassandra.Garrison@thomsonreuters.com; +52 55 6200 7873;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.