Central European Media Says First-Quarter Loss Shrinks
CME has been battling a slower-than-expected pickup in advertising sales as regional economies emerge from recession. The company operates channels in the Czech Republic, Bulgaria, Romania, Croatia, Slovakia and Slovenia.
The broadcaster sees the current year as “challenging” as uncertainties in Europe may hurt consumption, Chief Executive Officer Adrian Sarbu said on a conference call today. Economic growth will probably remain “flat” across CME’s markets and may lead to a “slight” decline in TV advertising spending in 2012, Sarbu said.
The net loss narrowed to $13.4 million from $21.1 million for the same period a year earlier. Revenue fell 3 percent to $167.4 million.
CME expects 2012 operating income before appreciation and amortization to be in line with current analysts’ expectations, ranging from $175 million to $180 million, Sarbu said. The broadcaster aims to strengthen audience and market leadership as well as maintain cost discipline, he said.
“We are taking significant steps to deleverage with support from two of our largest shareholders, Time Warner and Ronald Lauder,” Sarbu said in a statement released on April 30. “These steps, together with the planned expansion of subscription revenues, will position the company for growth in the future.”
It said Time Warner Inc. (TWX) will provide a $300 million loan to pay debts coming due from 2013. The New York-based media company and CME Chairman Ronald Lauder’s RSL Capital LLC will also pay $86.4 million for 11.5 million Class A shares. Time Warner’s existing stake will rise to 40 percent.
Time Warner purchased a 31 percent stake in CME for $241.5 million in May 2009 with the agreement that Lauder, CME’s founder and non-executive chairman, will control Time Warner’s voting rights in the company for at least four years. Time Warner increased its stake to 34.4 percent in March 2011.
CME said it will purchase a total of $300 million of 3.5 percent senior convertible notes due in 2013, senior floating rate notes due 2014 and 11.625 percent senior notes due 2016.
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