July 9, 2019 / 12:44 AM / 5 months ago

Mexico's Televisa posts 78.6% drop in net profit on lower government spending

FILE PHOTO: The logo of broadcaster Televisa is seen outside its headquarters in Mexico City, Mexico December 14, 2016. REUTERS/Henry Romero/File Photo

MEXICO CITY (Reuters) - Mexican broadcaster Televisa’s net profit plunged by 78.6% in the second quarter, the company said on Monday, a consequence of reduced advertising spending by both the Mexican government and clients in the private sector.

Televisa TLVACPO.MX, the world’s largest producer of Spanish-language TV content, reported a 919.1 million peso ($47.9 million) net profit for the quarter, down from 4.3 billion pesos during the same period last year. Net sales fell by 9% to 24.3 billion pesos.

Televisa said its 2018 results were boosted by the World Cup, creating a difficult comparison for the quarter. The company also continues to suffer from Mexican President Andres Manuel Lopez Obrador’s bid to slash government spending, which has meant fewer advertising dollars.

Private sector advertising also declined by about 5%, Televisa said.

“The slowdown of the economy and increased volatility in the exchange rate has turned our advertising clients more cautious in regard to their investments in advertising,” the company said in a report accompanying its results.

Televisa shares have come under pressure this year as the broadcaster best known for its high-drama soap operas searches for new revenue.

In February, Televisa shares suffered their steepest drop in more than 17 years after Co-Chief Executive Alfonso de Angoitia said the company had concluded that a spinoff of business units would not benefit shareholders.

Reporting by Julia Love; Editing by Peter Cooney and Lisa Shumaker

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