Mexico's Televisa, the world's biggest producer of Spanish-language TV content, said on Tuesday the weaker peso caused its debt-servicing costs to jump, offsetting a double-digit jump in second-quarter revenue.
The peso slipped more than 4 per cent against the dollar in the second quarter, increasing the costs of Televisa's dollar-denominated debt.
Still, investors responded positively to the 12.3-per-cent jump in revenue triggered by a pickup in pay-TV subscribers, and Televisa shares climbed as much as 2 per cent in early morning trading before paring their gains.
Televisa said it added 4.2 million pay-TV subscribers in the quarter, mostly in Mexico, and it ended June with 32 million subscribers.
Advertising spending was flat, however, hurt by a lack of advertising revenue during the presidential election campaign and foreign exchange losses.
"Advertising revenue remained practically flat, reflecting the temporary absence of investment from certain advertisers due to electoral campaigns in Mexico during the quarter," the company said in a statement.
The broadcaster earned 1.396 billion pesos ($105-million U.S.) in the April-June period, down from 1.662 billion pesos in the same quarter of 2011.
Televisa shares were up around 0.6 per cent at 56.89 pesos in mid-morning trading, still outperforming Mexico's benchmark IPC stock index, which was up 0.1 per cent.
The company's financing costs soared in large part because of its investment in cell phone company Iusacell.
Televisa, which has injected $1.6-billion in debt into the tiny cellphone company, last month finally sealed the terms of a deal that will convert that debt into a 50-per-cent equity stake, after the companies agreed to conditions imposed by Mexico's competition watchdog.
Iusacell is an affiliate of Televisa rival TV Azteca and competition regulators were worried the deal could create an incentive for Televisa and Azteca to fix TV advertising prices since together they control more than 90 per cent of that market.
The tie-up allows Televisa to enter Mexico's mobile phone market, which is dominated by America Movil, the company controlled by Carlos Slim, the world's richest man.
The arrangement will also allow Televisa to bundle together its Internet, cable and satellite TV packages with cellphone offers, executives told analysts on a call discussing results.
Televisa may also increase its spending on Iusacell to help the company's chances of taking on Mr. Slim's America Movil.
"We are focusing on improving the operations of Iusacell which is a challenge, as you know, it is really tough to compete against the incumbent," a Televisa executive said.
Iusacell last month reached a deal with Spain's Telefonica to share infrastructure in Mexico and that should help boost Iusacell's subscriber base, the executive said.
"We will invest additional capital in Iusacell to the extent that Iusacell is growing," he said, adding that Televisa does not yet have details on how much that might be. "We will start to share more information about Iusacell in the next quarter."