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CME Announces second quarter losses

2009-07-29
Central European Media Enterprises (CME, www.cetv-net.com) saw stocks drop by almost 8% on July 29, to 19.71 on NASDAQ, following release of its second quarter results.

Revenues in Q2 declined 39%, to $186.2 million compared to $304.8 in Q2 of 2008, showing the steepest decline in non-core developing operations. EBITDA fell from $102.1 million to $29.7 million for the same period. Overall, CME has a net loss of $20.4 million for the first half of 2009, compared with a profit of $77.9 million for the first half of 2008.

President and CEO Adrian Sarbu and CFO Charles Frank predicted that the decline in TV ad spend will end in the third quarter, with stabilazation predicted for the last quarter of 2009. TV ad spend is reaching 2007 levels, with the prediction that 2008 levels will return in 2011.

The company's efforts to strengthen its position for recovery include the purchase of MediaPro Entertainment in Romania and increased market shares in its core markets. Notable growth was seen in the Czech Republic, Slovakia, Slovenia, and Croatia. New media growth was especially strong in Slovenia.

CME's biggest challenges are in the Ukraine, where break-even EBITDA is projected for 2012, and Bulgaria, where positive EBITDA is expected to reach the break-even point in 2012.

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