TVN Sees Ebitda, Sales Rising as Owners Plan Stake Sale

TVN SA, Poland’s second-largest television network, forecasts its first annual core earnings growth in three years as its majority owners are considering a sale of their stake.

Adjusted earnings before interest, taxes, depreciation and amortization will rise to 520 million zloty ($155 million) this year from 506 million zloty in 2013 as the country’s stronger economic growth helps the advertising market, the Warsaw-based company said in a regulatory statement late yesterday. The profit may climb to 590 million zloty in 2015 and 630 million zloty in 2016.

TVN, whose earnings were hit by costs of bond refinancing, asset writedowns and a slowdown in the ad market, expects sales to rise from 5 percent to 9 percent in 2015 and 2016, compared with a “low-single digit” pace of growth seen this year. The forecasts come as Vivendi SA and ITI Group, which jointly hold a 51 percent stake in the broadcaster, review strategic options for their holding after being approached by suitors.

“The figures presented in the forecast are more or less in line with expectations,” Dominik Niszcz, a Warsaw-based analyst at Raiffeisen Centrobank AG, said by phone today. “What the statement actually signals is that the sale of the TVN stake is coming closer.”

TVN shares fell for the first time this week, losing 1.7 percent to 15.22 zloty as of 9:37 a.m. in Warsaw and valuing the company at 5.33 billion zloty.

Share Buyback

Time Warner Inc. and Discovery Communications Inc. are among potential bidders for a controlling stake in TVN, people familiar with the matter said last month. TVN Chief Executive Officer Markus Tellenbach expects “about a dozen” companies interested in the sale, he said on Nov. 6.

TVN will continue to buy back shares next year and plans to pay out about 50 percent of its 2015 net income as dividend, it said in the statement.

The company will buy back 225 million zloty to 250 million zloty of shares as part of a 500-million zloty plan approved by shareholders in April. TVN has already bought 100 million zloty of shares under the program and announced a further 150 million-zloty buyback this month.

The broadcaster also plans to invest 70 million zloty next year and 60 million zloty in 2016, it said.

Operating cash flow in excess of investments, taxes, interest payments and money distributed to shareholders will be used to reduce debt. While TVN has no plans to take on new debt, it may refinance existing bonds if market conditions are “favorable,” it said.

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