Central European Media Enterprises Ltd. Reports Results for the Second Quarter and Six Months Ended June 30, 2018
HAMILTON, Bermuda--(BUSINESS WIRE)--Jul 24, 2018--Central European Media Enterprises Ltd. (“CME” or the “Company”) (NASDAQ/Prague Stock Exchange:CETV) today announced financial results for the three and six months ended June 30, 2018.
Year-to-date operational and financial highlights:TV advertising revenues increased 16% at actual rates and 3% at constant rates in the first half of 2018. Carriage fees and subscription revenues increased 15% at actual rates and 4% at constant rates. OIBDA increased 19% at actual rates and 8% at constant rates, resulting in OIBDA margin expansion to 29% from 28%. Unlevered free cash flow for the six months ended June 30, 2018 increased 39% to US$ 89.3 million. CME repaid a total of €160 million (approximately US$ 187 million) of debt in the first half of 2018 using proceeds from warrant exercises and cash generated by the business, which together with the improvement in our operations reduced our net leverage ratio to 4.4x at the end of June. Following the repricing of our guarantee fees in April, our 4.1% average cost of borrowing is about 190 basis points lower than the start of the year, and will fall another 50 basis points once our net leverage is less than 4x.
On July 31, 2018, we expect to complete the previously announced sale of our operations in Croatia to Slovenia Broadband S.a r.l., a subsidiary of United Group B.V. (“United Group”). If the sale of our operations in Croatia had closed on June 30, 2018, the repayment of debt with sale proceeds would have reduced our net leverage ratio to 4.1x at the end of the second quarter. We also previously announced on July 10, 2017 that we agreed to sell our operations in Slovenia to the United Group, and that transaction still remains subject to certain closing conditions, including receipt of Slovenian regulatory approval. These businesses are classified as held for sale and presented as discontinued operations for all periods. The discussion of results in this release relates to our continuing operations in the four remaining operating segments.
Michael Del Nin, Co-Chief Executive Officer, commented: “Our financial performance in the second quarter was right in line with our expectations from three months ago. We also continue to expect that growth in profitability will accelerate sharply in the second half of 2018 as our businesses perform strongly across the board, leading to another full year of outstanding results and strong free cash flow generation. Combined with the significant progress that we continue to make on debt reduction, CME has reached the middle of the year in the best financial shape in a decade.”
Christoph Mainusch, Co-Chief Executive Officer, added: “The results of the spring season confirm our status as market leaders and CME has long been setting high standards for content development. We have always invested in our core assets, and will continue to strengthen our programming line-up with new formats in addition to local favorites. We expect television will remain a cornerstone of building awareness for existing brands and new product launches, and we will continue to expand our offering with complementary assets to improve the reach we provide for advertisers and diversify our revenues.”
In this release we refer to several non-GAAP financial measures, including OIBDA, OIBDA margin, free cash flow, unlevered free cash flow and constant currency percentage movements. Please see “Non-GAAP Financial Measures” below for additional information, including definitions and reconciliations to US GAAP financial measures.
Consolidated results for the three months ended June 30, 2018 and 2017 were:
Consolidated results for the six months ended June 30, 2018 and 2017 were:
Teleconference and Audio Webcast Details
CME will host a teleconference and audio webcast to discuss its second quarter results on Tuesday, July 24, 2018 at 9 a.m. New York time (2 p.m. London and 3 p.m. Prague time). The audio 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 +1-647-689-5402 ten minutes prior to the start time and reference conference ID 6979049. The conference call will also be audio webcasted via www.cme.net. It can be heard on iPads, iPhones and a range of devices supporting Android and Windows operating systems.
A digital audio replay of the webcast will be available for two weeks following the call 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.
Important factors that contribute to such risks include, but are not limited to, those factors set forth under “Risk Factors” in our Quarterly Report on Form 10-Q for the period ended June 30, 2018 as well as the following: the effect of changes in global and regional economic conditions and the extent, timing and duration of the recovery in our markets; levels of television advertising spending and the rate of development of the advertising markets in the countries in which we operate; the extent to which our debt service obligations and covenants may restrict our business; our exposure to additional tax liabilities as well as liabilities resulting from regulatory or legal proceedings initiated against us; our ability to refinance our existing indebtedness; our success in continuing our initiatives to diversify and enhance our revenue streams; our ability to make cost-effective investments in our television businesses, including investments in programming; our ability to develop and acquire necessary programming and attract audiences; our ability to consummate the sale of our operations in Croatia and Slovenia; and changes in the political and regulatory environments where we operate and in the application of relevant laws and regulations.
The foregoing review of important factors should not be construed as exhaustive. For a more detailed description of these uncertainties and other factors, please see the “Risk Factors” and “Forward-looking Statements” sections in CME’s Quarterly Report on Form 10-Q for the period ended June 30, 2018. 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 Quarterly Report on Form 10-Q for the period ended June 30, 2018, which was filed with the Securities and Exchange Commission on July 24, 2018.
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. Please note that we may announce material information using SEC filings, press releases, public conference calls, webcasts and posts to the Investors section of our website, www.cme.net. In the future, we will continue to use these channels to communicate important information about CME and our operations. Information that we post on our website could be deemed material. Therefore, we encourage investors, the media, our customers and others interested in CME to review the information we post at www.cme.net.
CME is a media and entertainment company continuing to operate leading businesses in four Central and Eastern European markets with an aggregate population of more than 40 million people. CME’s continuing operations broadcast 26 television channels in Bulgaria (bTV, bTV Cinema, bTV Comedy, bTV Action, bTV Lady and Ring), the Czech Republic (Nova, Nova 2, Nova Cinema, Nova Sport 1, Nova Sport 2, Nova International, Nova Action and Nova Gold), Romania (PRO TV, PRO 2, PRO X, PRO GOLD, PRO CINEMA, PRO TV International, MTV Romania and PRO TV Chisinau) and the Slovak Republic (TV Markíza, Markíza International, Doma and Dajto). CME is traded on the NASDAQ Global Select Market and the Prague Stock Exchange under the ticker symbol “CETV.”
This article has been truncated. You can see the rest of this article by visiting http://www.businesswire.com/news/home/20180723005827/en.