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By Jason Hovet
PRAGUE, July 30 (Reuters) - Revenue at TV station group
Central European Media Enterprises (CME) jumped 41 percent
year-on-year in the second quarter, beating forecasts on the
back of strong advertising spending in fast-growing central and
eastern Europe and the weak dollar.
Quarterly revenue grew to $305.4 million from $216.3 million
in the April-June period a year ago, and above expectations of
$293.1 million forecast in a Reuters poll of 10 analysts.
Shares in CME <CETV.O><> jumped more than 4 percent
in early trade in Prague before easing to 1,295 crowns, still
3.1 percent up, by 0945 GMT.
Growth was led by CME's largest markets, the Czech Republic
and Romania, where turnover rose 39.7 percent and 52.9 percent,
respectively, the broadcaster said on Wednesday.
"The outstanding second-quarter performance demonstrates
both the strength of our networks and the continuing growth of
the advertising markets across all of our markets," chief
executive Michael Garin said in a statement.
CME shares have dropped 38.9 percent since the start of the
year, underperforming a 20.3 percent loss for Prague's PX index.
It trades at 20.1 times estimated earnings, above the
European media sector average of 16.5, according to Reuters
data.
CURRENCY STRENGTH
Group segment EBITDA, or earnings before interest, tax,
depreciation, amortisation and corporate costs, rose 53 percent
to $133.1 million, compared with a forecast of $118.1 million.
Segment data exclude some corporate costs, currency gains or
losses and other items.
Net profit rose to $67.6 million in the quarter from $34.6
million a year ago, ahead of expectations of $51.5 million.
Analysts said the results were aided by the weaker dollar
versus local currencies in the six central and eastern European
markets where CME operates.
"(It is) positive in that consensus numbers have been
exceeded, though perhaps offset by consideration of what appears
to be a same-currency sales growth slowdown, by 5 percentage
points compared to full year 2007 growth," Wood & Co. analysts
wrote.
CME has said it expects full-year 2008 segment revenue to
rise 31 percent to $1.1 billion. It forecast a 33 percent jump
to $425 million in segment EBITDA.
CME, with a market capitalisation of $3.5 billion, has grown
rapidly in the fast-expanding central and east European
economies where rising consumer wealth has fuelled advertising.
The group is pushing to improve operations in Ukraine, its
largest market by population contributing just 15 percent to
revenue and 6 percent to EBITDA in 2007, after acquiring nearly
full control over its flagship station there earlier this year.
"We intend to be the leading broadcaster in Ukraine with our
operations generating $500 million of revenue and $200 million
of Segment EBITDA in 2012," Chief Operating Officer Adrian Sarbu
said.
The Bermuda-based media group said on Monday it bought an 80
percent stake in two Bulgarian stations for $172 million -- its
first expansion into a new country in three years.
(Reporting by Jason Hovet and Varsha Tickoo; Editing by Louise
Ireland/Will Waterman)
