(Adds quotes, details, quotes, share price)
By Jason Hovet
LONDON, July 4 (Reuters) - Television group Central European
Media Enterprises (CME) <CETV.O> <> expects revenue
from its Ukraine operations to more than double over the next
three years to around $300 million, its chief executive said.
Ukraine is by far the biggest market among the six central
and eastern European countries where CME operates, but it
contributed only 15 percent to the group's revenues in 2007.
Michael Garin told Reuters in an interview the Ukrainian
advertising market could grow to around $1 billion in three
years according to outside estimates, from the current $400
million, and CME's revenue growth should match that pace.
"Ukraine will be the fastest growing market and the most
important market in terms of total contribution to CME over the
coming years," Garin said.
"If we have a third of revenues there, which is not an
unreasonable assumption, that would be $300 million," he said.
"Certainly we expect to have at least a third of the market
within three years, which has been historical."
CME, controlled by U.S. businessman Ronald Lauder, has grown
rapidly in past years, helped by expansion in regional markets
where strong economic growth and rising consumer demand have
lifted television ad spending.
The company's enterprise value, or equity plus net debt,
stands at 14.4 times its EBTIDA, a higher multiple than its main
regional rival TVN <TVNN.WA>, which trades at 12.4, according to
Reuters data.
The group has not ruled out further expansion, including
into the large Russian and Turkish markets.
Last week, CME raised its holding in Ukraine's Studio 1+1
channel to 90 percent after buying a 30-percent stake for $219.6
million. It holds an option on the remaining 10 percent.
Studio 1+1 revenues grew 30 percent to $125.3 million in
2007, while CME's two other niche Ukraine stations added $2.7
million.
CME, which operates channels in the Czech Republic,
Slovakia, Romania, Slovenia, Croatia and Ukraine, saw segment
revenues -- combined revenues of individual stations -- in 2007
total $840 million, a 39 percent annual rise.
The Czech market was the largest contributor with $279.2
million in revenues, followed by Romania with $215.4 million.
CME shares, listed on the Nasdaq and in Prague, have fallen
36.6 percent since the start of the year, and on Friday traded
1.44 percent higher at 1,335 crowns at 1220 GMT.
In Ukraine, with a population of 46.4 million but the lowest
advertising spending among CME's six markets, EBITDA dipped to
$27.5 million from $30 million in 2007, squeezed by programming
costs.
"CME's ambition over the next few years in Ukraine is to
take the 20 percent of self-production in primetime to 70
percent, which is the average in other countries," Garin said.
He added the $70 million CME spends now in Ukraine can be
better utilised and does not need to be increased.
CME expects overall group revenue to hit $1.1 billion in
2008, with segment EBITDA growing 33 percent to $425 million,
targets Garin does not see changing up or down. The group has
also said revenues should double within five years.
(Editing by Paul Bolding)
