CTCM’s industry-topping margins prove the Russia story

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More great news for Moscow broadcaster CTC Media and, by implication, the entire Russian consumer segment. CTCM ( quote ) printed a profit of $145 million for the full year, of which a spectacular $75 million came in the fourth quarter alone. The full-year number is up 45%, but the fourth quarter is 260% better than what CTCM reported back in late 2009. As Morgan Stanley recently pointed out, Russian ad spending is growing at a compound average rate of 15%, better than just about anywhere else out there in the BRIC or elsewhere. CTCM gets 95% of its income from Russian advertisers and seems to be getting an even bigger share of that market, so as the overall Russian pie grows, so should this company. Russian ad sales were up 22%, well ahead of estimates for the broader market. Of course, margins are also critical here. And as it turns out, CTCM is reaping a gross margin of 93% on its sales -- the company is almost pure pass-through profit now after cutting its costs over the last year. Far from being the kind of "inefficient behemoth" that some investors think of the emerging markets being infested with, this is a lean and very efficient company -- one of the very best media plays you can trade




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , International , Stocks

Referenced Stocks: CTCM

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