Intl networks boost growth in Discovery 1Q revenues, net income

MUMBAI: Infotainment broadcaster Discovery has reported financial results for the first quarter ended 31 March 2013 which got a boost by the international networks. Revenues increased by seven per cent to $1.1 billion

Adjusted OIBDA decreased to $498 million (up eight per cent excluding licensing agreements and foreign currency). Net income increased by four per cent to $231 million

Discovery president and CEO David Zaslav said, "The significant operating momentum Discovery generated throughout 2012 continued unabated in the first quarter with more and more audiences around the globe viewing our unique programming.

"The sustained investment we have made in developing compelling content, along with the quality of our brands, translated into further market share gains, with record first quarter viewership at our domestic networks and 16 per cent audience growth across our international portfolio. As we continue to invest in the organic growth opportunities our diverse distribution platform provides, we have also completed several strategic acquisitions which we expect will further broaden our asset mix around the world and bolster our long-term growth prospects. 2013 is off to a great start and with continued focus on strong operating execution, we anticipate building on the financial success we have achieved over the last several years while delivering significant shareholder value."

First quarter revenues of $1.1 billion were up by $71 million, or seven per cent, compared to the first quarter a year ago, led by 17 per cent growth at International Networks and one per cent growth at US Networks which included the impact of additional licensing revenues in the prior year. OIBDA declined by two per cent to $498 million, as an eight per cent increase at International Networks was offset by a decrease of five per cent at US Networks due to the additional licensing revenue in last year?s quarter. Excluding the impact of licensing agreements and foreign currency, total company revenues increased by 12 per cent and adjusted OIBDA increased by eight per cent.

First quarter net income of $231 million increased by $10 million compared to $221 million for the first quarter a year ago, primarily due to the underlying operating performance in the current year?s quarter as well as a $92 million gain associated with the consolidation of Discovery Japan and $46 million of improved equity earnings, partially offset by higher taxes, increased mark-to-market equity-based compensation and $59 million of losses from hedging activities primarily associated with the acquisition of the SBS Nordic operations.

Free cash flow was $105 million for the first quarter, a decrease of $122 million from the first quarter of 2012, due to higher content investment as well as increased tax and long-term incentive compensation payments.