Fitch: Latin American Media Outlook Remains Stable
OREANDA-NEWS. Fitch Ratings has published a new report on the 2016 outlook for Latin American media industry.
Fitch expects the credit profiles of the rated Latin American broadcasters, except TV Azteca S.A.B. de C.V., to remain broadly stable in 2016, despite weak advertising demand under a sluggish economy.
'Most operators are well positioned to mitigate the suppressed free-to-air (FTA) TV's advertising demand in 2016 given their diversified cash flow sources and solid balance sheets,' according to Alvin Lim, Director at Fitch. 'On that note, TV Azteca will remain most vulnerable among the rated issuers given its over-reliance on the FTA revenues,' added Lim.
Fitch does not foresee any material industry-wide advertising price increases in 2016 as advertisers' budget could remain constrained. This, combined with increasing production costs, could pressure the issuers' profitability of the FTA segments, but cash flow generation from other sources, such as content sales and new business platforms, would help retain stable operational cash flow generation and financial metrics.
Fitch also believes that free-to-air TV's dominant position among advertisement media will remain intact given high penetrations and viewership in households against the backdrop of the increasing pay-TV and Internet market shares.