Weaknesses in financial controls drop Televisa’s shares

The problems were related to the design of IT controls over users’ access to systems and controls over accounting in its cable and content divisions
The logo of broadcaster Televisa is seen outside its headquarters in Mexico City – Photo: Henry Romero/REUTERS
27/01/2018
13:02
Newsroom & Agencies
Mexico City
REUTERS
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On Friday, Mexican broadcaster Grupo Televisa disclosed it had reported weaknesses in its financial controls to the U.S. Securities Exchange Commission (SEC), sending its shares initially down as much as 10% at a historical price of MXN$70.12.

The company said the problems were related to the design of IT controls over users’ access to systems and controls over accounting in its cable and content divisions.

It had consulted auditors PriceWaterhouseCoopers (PWC) over financial information dating to December 31, 2016.

In a statement sent to the Mexican Stock Exchange (BMV), Televisa explained: "A material weakness is a mere deficiency, or a combination thereof, in the internal control over financial information," adding that so far there was no evidence the deficiencies led to incorrect or imprecise figures in its results. However, the company will update the audit report in its 2016 20-F filing.

Televisa’s shares later recovered and were down 2% at a price of MXN$76.36 as of 1:30 p.m. local time (19:30 GMT).

Like its U.S. peers, the company has been under pressure from weaker advertising sales as younger viewers choose online streaming over cable television.

Televisa’s long-time Chief Executive Emilio Azcárraga stepped down in January, leaving Bernardo Gómez and Alfonso de Angoitia as co-chief executives. Azcárraga remained chairman of the board.

The head of their cable division was shot dead in November after a group of men tried to steal his bike on a highway outside Mexico City. The company has since appointed a temporary head of the unit.

The new leadership team, coupled with Televisa’s efforts to shore up its advertising business, will likely mean volatility in the company’s stock, Intercam analyst Alik García said.

“There are several issues accumulating,” he concluded.

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