Financial statements for 2002 just filed with the U.S. Securities & Exchange Commission (SEC) by two Brazilian MSOs portray the crisis faced by the industry last year, the worst in the history of pay television in Brazil. The documents were filed by TVA and ITSA (TV Filme).
TVA, which filed with the SEC on Tuesday, July 15, reports gross sales of 89.7 million US Dollars in 2002, down from 107.9m USD in 2001. Operating expenses totaled 107.3m USD, compared with 134.4m in 2001. The bottom line in 2002 was a net loss of 71.4m USD, compared with 75.8m USD in 2001. The number of subscribers was 300,000 in December 2002, down from 359,000 a year earlier.
The report filed with the SEC by TVA highlights concern about the performance of the Brazilian economy in 2003, especially in connection with the possibility of interference by political variables. This type of risk warning is mandatory in a document designed to be read by foreign investors.
Nevertheless, it?s worth noting the tone in which TVA?s report presents its assessment of the business outlook, based on independent auditors concerns: ?The Company's recurring losses from operations, working capital deficiency and shareholders? deficit raise substantial doubt about its ability to continue as a going concern?, the document says.
Globopar?s 2002 filings also contained a fairly somber statement about the future, signed by the company?s independent auditors.
Measures are being taken to deal with the situation, management adds, including cost savings, securitization of receivables and disposal of non-strategic assets.
TV Filme?s 2002 report, filed with the SEC ten days ago, includes a forward-looking statement with similar content and concern, except in this case it?s signed by external auditors.
Gross sales totaled 15.69m USD, down from 21m USD in 2001. Operating expenses amounted to 19.2m USD (31.37m USD in 2001). The bottom line was a net loss of 55.3m USD (20.3m USD in 2001). The subscriber base stood at 58,600 in December 2002, down from 69,300 a year earlier.
A management spokesperson confirmed that TV Filme?s 2002 results were indeed disappointing but said the subscriber base shows signs of stabilizing in 2003.