CTC Media Reports Third Quarter 2007 Financial Results
29 Oct 2007
- Consolidated Revenue Increases 33% to US $94.1 Million -
- OIBDA Increases 68% to US $32.0 Million -
- Net Income Increases 106% to US $17.4 Million-
- US $0.11 Earnings Per Share -
MOSCOW – October 29, 2007 – CTC Media, Inc. (NASDAQ: CTCM), a leading television broadcaster
in Russia, today reported financial results for the three- and nine-month periods ended September 30, 2007.
|
US $ 000’s, except per share data |
Three months
ended |
|
Nine months
ended |
|
|
|
September 30, |
Change |
September 30, 2006 2007 |
Change
23% |
2006 2007 |
|
Total operating revenues |
$70,919 $94,084 |
33% |
$252,901 $310,352 |
|
Total operating expenses |
(57,223) (69,674) |
22% |
(156,928) (202,132) |
29% |
|
OIBDA1 |
19,022 31,960 |
68% |
110,220 127,670 |
16% |
|
Net income |
$8,443 $17,399 |
106% |
$65,210 $76,214 |
17% |
|
Earnings per share |
$0.05 $0.11 |
120% |
$0.43 $0.48 |
12% |
Financial Highlights
• Strong quarterly and nine-month results across all key financial metrics
• Consolidated revenue increased 33% to US $94.1 million in the third quarter and 23% to US $310.4 million in
the first nine months of 2007
• OIBDA increased 68% to US $32.0 million and 16% to US $127.7 million in the three- and nine-month periods
ended September 30, 2007
• Net income increased 106% to US $17.4 million in the third quarter and 17% to US $76.2 million in the first
nine months of 2007
• US $0.11 and US $0.48 fully diluted earnings per share for the three- and nine-month periods ended September
30, 2007
Corporate Highlights
• CTC Media combined audience share was 10.6% in the third quarter of 2007 compared to 11.6% in the
third quarter of 2006
• CTC Network audience share was 8.7% in the third quarter of 2007 compared to 10.1% in the third
quarter of 2006
• Domashny Network audience share was 1.9% in the third quarter of 2007 compared to 1.5% in the third
quarter of 2006
• Acquired a new station in Stavropol for Domashny Television Station Group
• Entered into a definitive agreement to acquire a majority financial interest in Channel 31 group, one of
the leading broadcasters in Kazakhstan
• Set up a television company in Uzbekistan, which is expected to commence broadcasting in 2008
1 OIBDA is defined as operating income before depreciation and amortization (exclusive of amortization of
programming rights and sublicensing rights). OIBDA is a non-GAAP financial measure. Please refer to
Attachment A for a reconciliation of OIBDA to net income.
Alexander Rodnyansky, Chief Executive Officer, stated, “Our third quarter results continue to reflect the
strength of the Russian television advertising market, our dedication to delivering premium audiences to
advertisers and the quality of our CTC and Domashny brands. Considerable year-on-year growth in OIBDA
and all other profitability metrics underscores efficiency of our business model and management’s focus on
financial results.”
“We enjoyed a solid start to the fall programming season in an increasingly competitive landscape, with the
new season of our Cadets weekday prime-time series, Daddy’s Girls sitcom and School #1 drama series
among the leading premiers on our flagship CTC Network. We look forward to continue rolling out more
premier shows and series as we progress into the fourth quarter.”
“As we look forward to 2008, we expect to continue to capitalize on the healthy growth of the Russian TV
advertising market, among the highest in Europe, the strength of our CTC and Domashny brands and the
resilience of our business model that allows us to deliver OIBDA profitability among the highest in the
industry.”
“We also look forward to expanding our operations in Kazakhstan and Uzbekistan. In the third quarter, we
laid the groundwork for this expansion, having secured the agreement to acquire a majority economic
interest in Channel 31 in Kazakhstan and having set up a television company in Uzbekistan. We believe our
expansion into these new markets, combined with continued growth in our core Russian market and our
prudent approach to programming and cost management will result in continued value creation for our
shareholders over the long term.”
Results for the Three Months Ended September 30, 2007
The third quarter is historically a low period in the broadcasting industry as a result of seasonality trends in
viewing. While our direct operating costs are relatively evenly distributed throughout the year, selling, general
and administrative costs in the third quarter include a significant portion of advertising and promotional
expenses related to the launch of the new fall television season. As a result of these industry-wide trends, CTC
Media’s revenues and profit margins are historically lowest in the third quarter.
CTC Media’s total operating revenue for the three months ended September 30, 2007, increased 33% to US US $94.1 million from US US $70.9 million for the three months ended September 30, 2006. The revenue growth primarily reflects the continued expansion of the Russian television advertising market, increased advertising rates and appreciation of the ruble against the dollar, offset by a decrease in CTC Network audience share. Because we record our advertising revenues net of commissions, revenues were also favorably impacted by the lower commission rate paid by our owned-and-operated stations to Video International pursuant to the variable
commission rate negotiated through 2007.
The CTC Network’s audience share was 8.7% for the third quarter of 2007, lower than the company’s
expectations and down from 10.1% in the third quarter of 2006. CTC remains the fourth most watched
broadcaster in Russia overall. Domashny’s audience share grew from 1.5% for the three months ended
September 30, 2006, to 1.9% for the three months ended September 30, 2007. As a result, CTC Media’s
combined audience share was 10.6% in the third quarter of 2007 as compared to 11.6% in the third quarter of
2006.
Consolidated total operating expenses in the third quarter of 2007 amounted to US $69.7 million compared to
US $57.2 million in the third quarter of 2006, an increase of 22%. Total operating expenses grew more slowly
than revenue, primarily reflecting sound cost control, including over programming rights, our largest and most
important cost item. Amortization of programming and sublicensing rights increased 22%, and decreased as a
percentage of revenue, from 44% in the third quarter of 2006, to 40%, primarily due to our cost-efficient
approach to weekend programming in July-August. Third quarter costs included US $3.5 million in stock-based
compensation compared to US US $3.0 million in the third quarter of 2006, and US $7.6 million in amortization and depreciation expense (an increase of US $2.3 million over the third quarter of 2006 primarily due to acquisition of new television stations).
OIBDA increased 68% to US $32.0 million for the third quarter of 2007 compared to US $19.0 million in the third
quarter of 2006. The OIBDA margin improved from 26.8% to 34.0% during this period.
Operating income for the quarter was US $24.4 million compared to US $13.7 million for the three months ended
September 30, 2006, an increase of 78%. Operating income as a percentage of total operating revenue grew
from 19.3% in the third quarter of 2006 to 25.9% in the third quarter of 2007.
Net income for the quarter was US $17.4 million compared to US $8.4 million for the three months ended September 30, 2006. Fully diluted income per share was US $0.11 for the three months ended September 30, 2007, compared to US $0.05 for the three months ended September 30, 2006.
|
