AMC Networks has reported financial results for the first quarter ended March 31st 2020.
First quarter net revenues decreased 6.4 per cent, or $50 million, to $734 million over the first quarter of 2019. The decrease in net revenues reflected a 8 per cent decline at National Networks and essentially flat revenues at International and Other. Operating income was $173 million, a decrease of 29.4 per cent, or $72 million, versus the prior year period. The decrease reflected a 22.4 per cent decline in operating income at National Networks and an increase of $6 million in operating loss at International and Other.
National Networks principally consists of the Company’s five nationally distributed programming networks, AMC, BBC AMERICA, IFC, SundanceTV and WE tv; and AMC Studios, the Company’s television production business.
National Networks revenues for the first quarter 2020 decreased 8 per cent to $567 million, operating income decreased 22.4 per cent to $195 million, and adjusted operating income decreased 21.4 per cent to $218 million, all compared to the prior year period.
First quarter revenues reflected a 10.8 per cent decrease in advertising revenues to $213 million. The decrease in advertising revenues principally related to lower delivery as well as the timing of the airing of original programming partially offset by higher pricing. Distribution revenues decreased 6.2 per cent to $354 million. The decrease in distribution revenues was attributable to a decrease in subscription and content licensing revenues.
First quarter operating income and adjusted operating income reflected the decrease in revenues and an increase in operating expenses. The increase in operating expenses was primarily attributable to higher legal and marketing expenses.
International and Other principally consists of AMC Networks International, the Company’s international programming business; AMC Networks SVOD, the Company’s targeted subscription streaming services, Acorn TV, Shudder, Sundance Now and UMC (Urban Movie Channel); Levity Entertainment Group, the Company’s production services and comedy venues business; and IFC Films, the Company’s independent film distribution business.
International and Other revenues for the first quarter of 2020 decreased 0.3 per cent to $170 million, operating loss increased $6 million to a loss of $19 million, and adjusted operating income decreased $2 million to $8 million, all compared to the prior year period.
First quarter revenues primarily reflected an increase at AMC Networks SVoD offset by a decrease at the Company’s international programming networks. To a lesser extent, revenues also decreased at IFC Films and Levity Entertainment.
First quarter operating income and adjusted operating income reflected the decrease in revenues and an increase in operating expenses. Operating income also reflected an increase in depreciation and amortization and restructuring and other related charges.
President and Chief Executive Officer Josh Sapan said: “In what has been a unique operating environment, AMC Networks continues to generate significant levels of free cash flow and remains well capitalised with a strong balance sheet and strong liquidity. We continue to make significant progress on our digital initiatives, including strong subscriber growth across our Acorn TV, Shudder, Sundance Now and UMC (Urban Movie Channel) SVoD services, as well as Acorn TV launching in the UK. Our portfolio of networks is delivering increased viewership in recent weeks, including a strong debut of the third season of Killing Eve and strong performance for the most recent and exceptional season of Better Call Saul.
“Our continued investment in key areas – creating strong content and valuable IP; growing our targeted SVoD services; and maximising the value of our linear channels – is enabling us to navigate this challenging time and will continue to serve us well when this environment stabilizes and as we look beyond this immediate period to the remainder of 2020 and ahead to 2021,” he added.