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Central European Media Enterprises Ltd. Reports Results for the Full Year and Fourth Quarter Ended December 31, 2011

(February 21, 2012)


FULL YEAR

- Net revenues of US$ 864.8 million up 17% -

- OIBDA of US$ 167.0 million up 56% -

- Free cash flow of US$ (3.5) million up 96% -



FOURTH QUARTER

- Net revenues of US$ 276.9 million up 8% -

- OIBDA of US$ 81.2 million up 25% -



HAMILTON, Bermuda, Feb. 22, 2012 (GLOBE NEWSWIRE) -- Central European Media Enterprises Ltd. ("CME" or the "Company") (Nasdaq:CETV) (Prague Stock Exchange:CETV) today announced financial results for the full year and three months ended December 31, 2011.



Net revenues for the year ended December 31, 2011 increased by US$ 127.6 million to US$ 864.8 million compared to 2010 and OIBDA1 increased by US$ 59.7 million to US$ 167.0 million. Operating income for the year was US$ 6.8 million. Net loss from continuing operations for the year was US$ (179.6) million. Free cash flow2 for the year improved to US$ (3.5) million from US$ (95.5) million for 2010.



Net revenues for the fourth quarter of 2011 increased by US$ 19.5 million to US$ 276.9 million compared to the fourth quarter of 2010. OIBDA for the quarter improved by US$ 16.4 million to US$ 81.2 million. Operating loss for the quarter was US$ (12.1) million. Net loss from continuing operations for the quarter was US$ (77.2) million.



Adrian Sarbu, President and Chief Executive Officer of CME, commented: "In a difficult year we kept our promises: our revenues grew by 17%, our OIBDA increased by 56% and our cash flow improved by 96%. We outperformed the markets following successful implementation of our new business model: One Content, Multiple Distribution. We maintained our leadership in each country and reduced like-for-like costs. We have positioned the company on a strong path for growth with revenues driven not only by advertising but also by content and digital distribution.  In 2012, we will focus on deleveraging, strengthening our leadership and fuelling new revenue engines."


1 OIBDA, which includes program rights amortization costs, is determined as operating income / (loss) before depreciation, amortization of intangible assets and impairments of assets as defined in "Segment Data" below.    




2 Free cash flow is defined as cash flows from continuing operating activities less expenditure on property, plant and equipment, net of disposals of property, plant and equipment.



Consolidated Results for the Year Ended December 31, 2011



Net revenues for the year ended December 31, 2011 increased by 17.3% to US$ 864.8 million from US$ 737.1 million for the year ended December 31, 2010.  Operating income, which included impairment losses of US$ 68.7 million, was US$ 6.8 million for the year ended December 31, 2011 compared to US$ 22.9 million for the year ended December 31, 2010.  Net loss from continuing operations for the year ended December 31, 2011 was US$ (179.6) million compared to a net loss of US$ (116.9) million for the year ended December 31, 2010. Fully diluted loss from continuing operations per share for the year ended December 31, 2011 was US$ (2.71) compared to US$ (1.77) for the year ended December 31, 2010.



OIBDA for the year ended December 31, 2011 increased by 55.6% to US$ 167.0 million from US$ 107.3 million in the year ended December 31, 2010. OIBDA margin3 for the year ended December 31, 2011 increased to 19.3% from 14.6% in the year ended December 31, 2010.



Headline consolidated results for the year ended December 31, 2011 and 2010 were:




























































 

 

 

RESULTS

 

For the Year Ended December 31,

(US $000's)

 

2011

2010

$ change

% change

Net revenues

 $ 864,782

 $ 737,134

 $ 127,648

17.3 %

OIBDA

167,002

107,323

59,679

55.6 %

Operating income

6,792

22,877

(16,085)

(70.3) %

Net loss from continuing operations

(179,604)

(116,924)

(62,680)

(53.6) %

Fully diluted loss from continuing operations per share

 $ (2.71)

 $ (1.77)

 $ (0.94)

(53.1) %


Consolidated Results for the Three Months Ended December 31, 2011



Net revenues for the three months ended December 31, 2011 increased by 7.6% to US$ 276.9 million from US$ 257.4 million for the three months ended December 31, 2010.  Operating loss for the quarter, which included impairment losses of US$ 68.7 million, was US$ (12.1) million compared to operating income of US$ 41.9 million for the three months ended December 31, 2010. Net loss for the quarter was US$ (77.2) million compared to a net loss of US$ (25.4) million for the three months ended December 31, 2010. Fully diluted loss per share for the three months ended December 31, 2011 was US$ (1.12) compared to a loss of US$ (0.41) in the same period of 2010.



OIBDA for the three months ended December 31, 2011 increased to US$ 81.2 million from US$ 64.8 million in the three months ended December 31, 2010. OIBDA margin for the three months ended December 31, 2011 increased to 29.3% from 25.2% in the three months ended December 31, 2010.



Headline consolidated results for the three months ended December 31, 2011 and 2010 were:




























































 

 

 

RESULTS

 

For the Three Months Ended December 31,

(US $000's)

 

2011

2010

$ change

% change

Net revenues

$ 276,882

$ 257,413

$ 19,469

7.6 %

OIBDA

81,165

64,776

16,389

25.3 %

Operating (loss) / income

(12,106)

41,903

(54,009)

n.m.4

Net loss

(77,225)

(25,442)

(51,783)

(203.5) %

Fully diluted loss per share

$ (1.12)

$ (0.41)

$ (0.71)

(173.2) %


3 OIBDA margin is defined as the ratio of OIBDA to Net revenues.



4 Number is not meaningful. 



Segment Results



We evaluate the performance of our operations based on Net revenues and OIBDA.



Our Net revenues and Consolidated OIBDA for the year ended December 31, 2011 and 2010 were:













































































































 

 

 

SEGMENT RESULTS

 

For the Year Ended December 31,

(US $000's)

 

2011

2010

$ change

% change

Broadcast

$ 774,978

$ 690,727

$ 84,251

12.2 %

Media Pro Entertainment

187,224

140,797

46,427

33.0 %

New Media

15,764

11,193

4,571

40.8 %

Intersegment revenues

(113,184)

(105,583)

(7,601)

(7.2) %

Net revenues

 $ 864,782

 $ 737,134

 $ 127,648

17.3 % 

 

 

 

 

 

Broadcast

$ 211,090

$ 164,415

$ 46,675

28.4 % 

Media Pro Entertainment

3,996

(3,005)

7,001

n.m.4

New Media

(2,558)

(6,542)

3,984

60.9 % 

Central

(41,851)

(44,062)

2,211

5.0 % 

Elimination

(3,675)

(3,483)

(192)

(5.5) %

Consolidated OIBDA

$ 167,002

$ 107,323

$ 59,679

55.6 %


Our Net revenues and Consolidated OIBDA for the three months ended December 31, 2011 and 2010 were:













































































































 

 

 

SEGMENT RESULTS

 

For the Three Months Ended December 31,

(US $000's)

 

2011

2010

$ change

% change

Broadcast

$ 245,062

$ 241,172

$ 3,890

1.6 %

Media Pro Entertainment

60,649

47,929

12,720

26.5 %

New Media

5,285

4,132

1,153

27.9 %

Intersegment revenues

(34,114)

(35,820)

1,706

4.8 %

Net revenues

$ 276,882

$ 257,413

$ 19,469

7.6

 

 

 

 

 

Broadcast

$ 88,688

$ 77,502

$ 11,186

14.4 %

Media Pro Entertainment

2,293

1,058

1,235

116.7 %

New Media

565

(173)

738

n.m.4

Central

(9,882)

(12,939)

3,057

23.6 %

Elimination

(499)

(672)

173

25.7 %

Consolidated OIBDA

$ 81,165

$ 64,776

$ 16,389

25.3 %


CME will host a teleconference and video webcast to discuss its fourth quarter and full year results on Wednesday, February 22, 2012 at 9:00 a.m. New York time (2:00 p.m. London time and 3:00 p.m. Prague time). The video webcast and teleconference will refer to presentation slides which will be available on CME's website at www.cme.net prior to the call. 



To access the teleconference, U.S. and international callers may dial +1 785-424-1051 ten minutes prior to the start time and reference passcode CETVQ411. The conference call will be video webcasted live via www.cme.net and can be viewed on a range of platforms including Windows, Android and Apple devices including iPhone and iPad.



The video webcast and a digital audio replay in MP3 format will be available for two weeks following the call at www.cme.net.



In the coming weeks, CME will post the results for the quarter and full year ended December 31, 2011 for its wholly-owned subsidiary CET 21 spol. s r.o. at www.cme.net.



Forward-Looking and Cautionary Statements



This press release contains forward-looking statements. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated.  Forward-looking statements reflect our current views with respect to future events and because our business is subject to such risks and uncertainties, actual results, our strategic plan, our financial position, results of operations and cash flows could differ materially from those described in or contemplated by the forward-looking statements.



For a more detailed description of these uncertainties and other factors, please see the "Risk Factors" section in CME's Annual Report on Form 10-K for the year period ended December 31, 2011, which was filed with the Securities and Exchange Commission on February 22, 2012. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise.



This press release should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011, which was filed with the Securities and Exchange Commission on February 22, 2012.



We make available free of charge on our website at www.cme.net our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.



CME is a media and entertainment company operating leading businesses in six Central and Eastern European markets with an aggregate population of approximately 50 million people. CME's broadcast operations are located in Bulgaria (bTV, bTV Cinema, bTV Comedy, bTV Action, bTV Lady and Ring.bg), Croatia (Nova TV, Doma and Nova World), the Czech Republic (TV Nova, Nova Cinema, Nova Sport and MTV Czech), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro, MTV Romania and PRO TV Chisinau Moldova), the Slovak Republic (TV Markíza and Doma) and Slovenia (POP TV, Kanal A and the POP NON STOP subscription package). CME's broadcast operations are supported by its production and distribution division, Media Pro Entertainment, as well as its New Media division, which operates Voyo, the pan-regional video-on-demand service.



CME is traded on the NASDAQ Global Select Market and the Prague Stock Exchange under the ticker symbol "CETV".



For additional information, please visit www.cme.net.

































































































































































































CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

(US$ 000's, except share and per share data)

 

 

 

For the Year Ended

December 31,

 

2011

2010

Net revenues

$ 864,782

$ 737,134

Operating expenses:

 

 

Operating costs

136,018

123,339

Cost of programming

445,802

390,303

Depreciation of property, plant and equipment

52,954

54,415

Amortization of broadcast licenses and other intangibles

34,881

25,987

Cost of revenues

669,655

594,044

Selling, general and administrative expenses

119,587

119,816

Impairment charge

68,748

397

Operating income

6,792

22,877

Interest expense, net

(158,704)

(131,267)

Foreign currency exchange loss, net

(31,124)

(5,030)

Change in fair value of derivatives

7,281

1,164

Other income

1

357

Loss from continuing operations before tax

(175,754)

(111,899)

Provision for income taxes

(3,850)

(5,025)

Loss from continuing operations

(179,604)

(116,924)

Discontinued operations, net of tax


(3,922)

Gain on disposal of discontinued operations


217,619

Income from discontinued operations


213,697

Net (loss) / income

(179,604)

96,773

Net loss attributable to noncontrolling interests

4,993

3,402

Net (loss) / income attributable to CME Ltd.

 $ (174,611)

 $ 100,175

 

 

 

PER SHARE DATA:

 

 

Net (loss) / income per share

 

 

Continuing operations attributable to CME Ltd. - Basic and diluted

 $ (2.71)

 $ (1.77)

Discontinued operations attributable to CME Ltd. - Basic and diluted


3.34

Net (loss) / income attributable to CME Ltd - Basic and diluted

 $ (2.71)

 $ 1.57

 

 

 

Weighted average common shares used in computing per share amounts (000's):

 

 

Basic

64,385

64,029

Diluted

64,385

64,029










































































































































































 

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (continued)

(US$ 000's, except share and per share data)

 

 

 

 

 

 

For the Three Months Ended

December 31,

 

2011

2010

Net revenues

 $ 276,882

 $ 257,413

Operating expenses:

 

 

Operating costs

33,282

39,513

Cost of programming

132,058

121,693

Depreciation of property, plant and equipment

11,969

13,885

Amortization of broadcast licenses and other intangibles

11,488

7,297

Cost of revenues

188,797

182,388

Selling, general and administrative expenses

31,443

32,725

Impairment charge

68,748

397

Operating (loss) / income

(12,106)

41,903

Interest expense, net

(32,150)

(38,701)

Foreign currency exchange loss, net

(32,576)

(28,872)

Change in fair value of derivatives

2,681

3,425

Other income

770

557

Loss before tax

(73,381)

(21,688)

Provision for income taxes

(3,844)

(3,754)

Net loss

(77,225)

(25,442)

Net loss / (income) attributable to noncontrolling interests

4,834

(674)

Net loss attributable to CME Ltd.

 $ (72,391)

 $ (26,116)

 

 

 

PER SHARE DATA:

 

 

Net loss per share

 

 

Net loss attributable to CME Ltd - Basic and diluted

 $ (1.12)

 $ (0.41)

 

 

 

Weighted average common shares used in computing per share amounts (000's):

 

 

Basic

64,393

64,358

Diluted

64,393

64,358





























































































































































 

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(US$ 000's)

 

 

 

 

December 31,

2011

December 31,

2010

ASSETS

 

 

Cash and cash equivalents

 $ 186,386

 $ 244,050

Other current assets

351,903

368,035

Total current assets

538,289

612,085

Property, plant and equipment, net

217,367

250,902

Goodwill and other intangible assets, net

1,633,388

1,816,943

Other non-current assets

292,725

260,620

Total assets

 $ 2,681,769

 $ 2,940,550

LIABILITIES AND EQUITY

 

 

Accounts payable and accrued liabilities

 $ 240,048

 $ 224,058

Current portion of long-term debt and other financing arrangements

1,058

13,562

Other current liabilities

14,469

5,456

Total current liabilities

255,575

243,076

Long-term portion of long-term debt and other financing arrangements

1,323,311

1,346,222

Other non-current liabilities

84,941

103,500

Total liabilities

 $ 1,663,827

 $ 1,692,798

 

 

 

EQUITY

 

 

Common Stock

 $ 5,151

 $ 5,149

Additional paid-in capital

1,404,648

1,377,803

Accumulated deficit

(425,702)

(233,818)

Accumulated other comprehensive income

17,595

77,745

Total CME Ltd. shareholders' equity

1,001,692

1,226,879

Noncontrolling interests

16,250

20,873

Total equity

 $ 1,017,942

 $ 1,247,752

Total liabilities and equity

 $ 2,681,769

 $ 2,940,550














































































































 

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(US$ 000's)

 

 

 

For the Year Ended

December 31,

 

2011

2010

Net cash generated from / (used in) continuing operating activities

 $ 29,638

 $ (49,614)

Net cash used in continuing investing activities

(42,698)

(456,770)

Net cash (used in) / generated from financing activities

(38,168)

7,338

Net cash used in discontinued operations - operating activities


(5,921)

Net cash generated from discontinued operations - investing activities


307,790

Impact of exchange rate fluctuations on cash and cash equivalents

(6,436)

(4,727)

Net decrease in cash and cash equivalents

 $ (57,664)

 $ (201,904)

 

 

 

 

 

 

Net cash generated from / (used in) continuing operating activities

 $ 29,638

 $ (49,614)

Capital expenditure, net of proceeds from disposals

(33,101)

(45,872)

Free cash flow

$ (3,463)

$ (95,486)

 

 

 

Supplemental disclosure of cash flow information:

 

 

Cash paid for interest

$ 111,802

$ 100,901

Cash paid for income taxes (net of refunds)

$ 6,315

$ 14,714


Segment Data



We manage our business on a divisional basis, with three reportable segments: Broadcast, Media Pro Entertainment (our production and distribution division) and New Media.



We evaluate the performance of our segments based on Net revenues and OIBDA. OIBDA, which includes program rights amortization costs, is determined as operating income / (loss) before depreciation, amortization of intangible assets and impairments of assets. Items that are not allocated to our segments for purposes of evaluating their performance and therefore are not included in their OIBDA, include stock-based compensation and certain other items.  We believe OIBDA is useful to investors because it provides a more meaningful representation of our performance, as it excludes certain items that do not impact either our cash flows or the operating results of our operations.  OIBDA is also used as a component in determining management bonuses. Intersegment revenues and profits have been eliminated in consolidation.  OIBDA may not be comparable to similar measures reported by other companies.



Below are tables showing our Net revenues and OIBDA by segment for the three and twelve months ended December 31, 2011 and 2010, together with a reconciliation of OIBDA to our Condensed Consolidated Statement of Operations:


















































































































 

 

 

(US $000'S)

For the Year

Ended December 31,

For the Three Months

Ended December 31,

 

2011

2010

2011

2010

Net revenues

 

 

 

 

Broadcast:

 

 

 

 

Bulgaria

 $ 93,732

 $ 61,753

 $ 30,373

 $ 29,313

Croatia

61,502

51,350

19,053

16,659

Czech Republic

285,865

265,018

90,212

91,878

Romania

159,387

157,416

46,962

48,241

Slovak Republic

101,973

90,391

34,834

31,532

Slovenia

72,519

64,799

23,628

23,549

Total Broadcast

 $ 774,978

 $ 690,727

 $ 245,062

 $ 241,172

Media Pro Entertainment

 $ 187,224

 $ 140,797

 $ 60,649

 $ 47,929

New Media

 $ 15,764

 $ 11,193

 $ 5,285

 $ 4,132

Intersegment revenues5

(113,184)

(105,583)

(34,114)

(35,820)

Total net revenues

 $ 864,782

 $ 737,134

 $ 276,882

 $ 257,413


5 Reflects revenues earned by the Media Pro Entertainment segment through sales to the Broadcast segment. All other revenues are third party revenues.





































































































































































































































 

 

 

(US $000's)

For the Year

Ended December 31,

For the Three Months 

Ended December 31,

 

2011

2010

2011

2010

OIBDA

 

 

 

 

Broadcast:

 

 

 

 

Bulgaria

 $ 12,897

 $ (2,071)

 $ 7,682

 $ 9,049

Croatia

4,659

2,368

3,798

948

Czech Republic

140,386

122,818

52,795

48,371

Romania

25,939

25,997

8,568

6,408

Slovak Republic

9,968

(1,001)

8,284

3,954

Slovenia

19,602

18,427

8,205

9,578

Divisional operating costs

(2,361)

(2,123)

(644)

(806)

Total Broadcast

 $ 211,090

 $ 164,415

 $ 88,688

 $ 77,502

Media Pro Entertainment

 $ 3,996

 $ (3,005)

 $ 2,293

 $ 1,058

New Media

 $ (2,558)

 $ (6,542)

 $ 565

 $ (173)

Central

(41,851)

(44,062)

(9,882)

(12,939)

Elimination

(3,675)

(3,483)

(499)

(672)

Total OIBDA

 $ 167,002

 $ 107,323

 $ 81,165

 $ 64,776

 

 

 

(US $000's)

Reconciliation to Condensed Consolidated Statement of

For the Year

Ended December 31,

For the Three Months

Ended December 31,

Operations:

2011

2010

2011

2010

 

 

 

 

 

Total OIBDA

$ 167,002

$ 107,323

$ 81,165

$ 64,776

Depreciation of property, plant and equipment

(56,581)

(58,062)

(13,035)

(15,179)

Amortization of intangible assets

(34,881)

(25,987)

(11,488)

(7,297)

Impairment charge

(68,748)

(397)

(68,748)

(397)

Operating income / (loss)

 $ 6,792

 $ 22,877

 $ (12,106)

 $ 41,903

Interest expense, net

(158,704)

(131,267)

(32,150)

(38,701)

Foreign currency exchange loss, net

(31,124)

(5,030)

(32,576)

(28,872)

Change in fair value of derivatives

7,281

1,164

2,681

3,425

Other income

1

357

770

557

Provision for income taxes

(3,850)

(5,025)

(3,844)

(3,754)

Loss from continuing operations

 $ (179,604)

 $ (116,924)

 $ (77,225)

 $ (25,442)

CONTACT: Romana Wyllie
Vice President of Corporate Communications
Central European Media Enterprises
+420 242 465 525
romana.wyllie@cme.net

Page: 1


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