Televisa to merge its satellite TV, cable units 'as soon as possible'

FILE PHOTO: The logo of broadcaster Televisa is seen outside its headquarters in Mexico City

By Aida Pelaez-Fernandez

MEXICO CITY (Reuters) -Mexican broadcaster Televisa plans to merge its satellite TV unit Sky with its cable TV and internet service Izzi as soon as possible, the head of the new unit said on Friday.

Televisa is aiming to trim its financial expenses, and Izzi has had trouble staying competitive in recent quarters.

Francisco Valim, who will run the unit, said the combination will help Televisa to optimize the two business by allowing it to "homogenize regions, sales channels, (and) commission frameworks and better manage the customer base."

He said the bulk of the integration would take place between April and the end of June.

Benefits from the merger should become clearer in the third quarter of 2024, he said, when the firm expects to save some 400 million Mexican pesos ($23.37 million) in operating expenses.

Shares were up 6.5% at 10.8 pesos each in morning trading.

But both Sky and Izzi suffered setbacks over the quarter, with analysts at J.P. Morgan noting that Sky had "significant video subscriber losses", as it reported 250,600 organic disconnections in the quarter.

The Mexican firm earlier this month reached an agreement to buy out AT&T's stake in Sky, giving Televisa full control of the firm.

Sky's ratio of capital expenditures to sales should come in below 14% in 2024 as the restructuring is carried out.

On Thursday, Televisa reported net profits of 951.9 million pesos for the first quarter, reversing two consecutive quarters of losses, largely due to a reduction in financial expenses.

(Reporting by Aida Pelaez-Fernandez; Editing by Kylie Madry, Alistair Bell and Michael Erman)