27-04-2011

CME Revenues on the Rise in Q1 Statement

By Cathy Meils

    PRAGUE: Although still operating in the red, Central European Media Enterprises (CME, www.cetv-net.com) showed marked improvement over 2010 results in its first quarter earnings statement, released on 27 April 2011. Net revenues were up 20.3%, almost $30 million, to a quarterly total of $172.7 million, while net loss decreased by 50.7%, from $42.3 million in Q1 2010 to $21.1 million in Q1 2011.

    Adrian Sarbu, the company's President and CEO, told investors and press, "We are back on the road to growth." The growth, he added, was driven by the CME's new Bulgarian acquisition of the bTV group from News Corps in April 2010, as well as the launch of the woman's channel DOMA in Croatia. The company's acquisitions and investments resulted in a rise of 11% in costs.

    CME stock opened strong on New York's NASDAQ exchange spiking at an early morning high of $23 in heavy trading, before leveling off at slightly over $22 a share (a rise of nearly 6%) by midday.

    CME expects TV spend to pick up in the second half of 2011, with double digit increases in revenues for 2011, with a projected $810 million in revenues for the year. In the Czech Republic in particular, which has traditionally been the leading source of ad revenues for CME, the company expects to return to record 2008 levels within two years. It grew by just 5% in Q1, with expansion somewhat hindered by the government's new austerity measures. Sarbu contended that advertisers may have been spoiled by the low ad rates of recent years. "The value of our inventory, especially in prime time, is not properly appreciated," he said.

    Although revenues will continue to be dominated by TV advertising, CME has continued is expansion into other areas. Its New Media division saw a 35% increase in traffic, and the company plans to launch its new online entertainment platform VOYO (which bowed in Czech Republic) in all territories in 2011.

    CME is expanding its distribution activities with the acquisition of leading Czech and Slovak firm Bontonfilm. The acquisition is expected to be completed in Q2 of 2011.

    CME's entertainment content division, Media Pro Entertainment, produced nearly 500 hours of production to CME stations. The content activity, Sarbu said, "differentiates us from other players" in the region. Its original programmes consistently figure in the top ten when measured against local competitors' content.

    CME announced its next Investors Day will be held in Central London on 21 September 2011.

    CME operates television stations in Bulgaria (bTV, bTV Cinema, bTV Comedy, bTV Action and Ring.bg), Croatia (Nova TV, Doma and Nova World), the Czech Republic (TV Nova, Nova Cinema, Nova Sport and MTV Czech), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, PRO TV Chisinau, Sport.ro and MTV Romania), the Slovak Republic (TV Markíza and Doma) and Slovenia (POP TV, Kanal A and POP Brio). CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol "CETV".

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