TRADING of ABS-CBN Corp.’s shares resumes today after seven days of suspension at the Philippine Stock Exchange (PSE).
Investors have to price in the daily forgone revenues of the company after it was ordered closed by the National Telecommunications Commission (NTC) together with the uncertainties that lie ahead, according to Japhet Louis Tantiangco, analyst at Philstocks Financial Inc.
Tantiangco said the share price of ABS-CBN may suffer a decline although this may “not be as deep as we expected before the trading suspension.”
He said uncertainties are partially tempered by hopes coming from the provisional franchise that Congress is currently trying to pass.
“Investors may also appreciate the sense of urgency that is now being given to the case regarding ABS-CBN’s franchise renewal since it decreases the time of uncertainty. It gives us a hint that the decision on the franchise could be up sooner rather than later,” Tantiangco added.
The PSE said trading of ABS-CBN shares will resume today after the company releases a comprehensive report on the impact of the closure order on its free-to-air operation.
The network’s congressional franchise expired on May 4. The PSE suspended the trading immediately the day after the NTC issued the cease and desist order, May 6, 2020.
ABS-CBN in a regulatory filing Friday said the order “significantly” impacts its media, networks, and studio entertainments (MNSE) operations. About 68 percent of its revenues are sourced from its free-to-air advertising.
On a consolidated basis, the free-to-air advertising contributes approximately 50 percent of topline, ABS-CBN said.
ABS-CBN said the closure’s actual impact on MNSE will be difficult to estimate at present “since it will depend, among other things, on the duration of the time its television and radio stations are off-air, and its ability to generate alternative sources of revenues to make up for the shortfall.”
“Even as the impact of the COVID-19 (new coronavirus disease 2019) pandemic on the Philippine and global economy is yet to be fully realized, the order will put additional financial burden on the company. As developments on these are still quickly evolving and changing from day-to-day, the company finds that the transforming scenarios make assumptions, assessments and projections challenging and may not necessarily be valid or accurate for future scrutiny,” ABS-CBN said.
ABS-CBN continues to its MNSE for content creation and distribution through its other channels, cable TV, and digital and interactive media.
