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Central European Media Enterprises Ltd. (CETV)
Q2 2010 Earnings Call
July 28, 2010 09:04 AM ET
Adrian Sarbu – President and Chief Executive Officer
David Sach – Chief Financial Officer
Anthony Chhoy – Senior Vice President, Strategic Planning & Operations
Peter Dvorak – Senior Vice President, Broadcasting.
Daniel Penn – General Counsel
Romana Tomasova – Vice President Corporate Communications
Vivek Khanna – Deutsche Bank
Vijay Singh – Janco Partners
David Kestenbaum – Morgan Joseph
Ben Mogil – Stifel Nicolaus
Alexey Surkov – BNP Paribas
Robert Doucha – Sanning Capital
Jean-Yves Guibert –BNP Paribas
Previous Statements by CETV
» Central European Media Enterprises Ltd. Q4 2009 Earnings Call Transcript
» Central European Media Enterprises Ltd. Q3 2009 Earnings Conference Call
» Central European Media Enterprises Ltd Q2 2009 Earnings Call Transcript
The participants of today's call will be CME’s President and Chief Executive Officer, Adrian Sarbu.
Good afternoon. [inaudible]
Chief Financial Officer, David Sach
Anthony Chhoy, Senior Vice President, Strategic Planning & Operations.
And Peter Dvorak, Senior Vice President, Broadcasting.
And Finally our General Counsel, Daniel Penn.
Before I turn to Adrian, let me read the usual Safe Harbor statement. Our presentation today will contain forward-looking statements. Through these statements, we claim the protection of the Safe Harbor contained in the U.S. Private Securities Litigation Reform Act of 1995, and refer you to the forward-looking statements section in our Form 10-Q filed with the Securities and Exchange Commission earlier today for a list of such statements and the factors, which could cause future results to differ from those presented in this call.
We now evaluate the performance of our segments based on OIBDA or operating income before depreciation and amortization of intangible assets. OIBDA is calculated in the same way as EBITDA measures that we used previously. A detailed explanation is provided on page three of our presentation and in note 16 on page 32 of our Form 10-Q.
During this call, we will refer to certain financial information that is not in U.S. GAAP. Please see the appendix to the presentation for reconciliation to U.S. GAAP financial measures. In addition, our segment financial information that is presented in local currency is not in U.S. GAAP. We do not provide a reconciliation to these numbers as the U.S. GAAP amounts are expressed in US dollars in our financial statements. Additional information on our segment data is provided in note 16 to our financial statements on page 32 of our 10-Q.
And now, over to Adrian.
Good afternoon or good morning. In the second quarter 2010, our revenues reached $202 million and OIBDA $46 million, one year ago our reported revenues were $186 and OIBDA $29.7 million, since then we took important steps to reposition our operation in Central Eastern Europe, focusing on European Union and European Union accession countries.
We sold our Ukrainian business, integrated media brand entertainment and acquired a leading operations in Bulgaria bTV group. We addressed our operating cost without affecting audience leadership. We maintained or increased our advertising market share by various pricing initiatives and continued to build our brands today we are enjoying the first benefits.
In light of a 4% % TV advertising market decline in the second quarter. Our revenues increased on constant currency basis by 15% and our EBITDA by 6%. Today we are the leader in all our market. It is an important milestone our sixth quarter of crisis in the region.
No bad event which would happen in this market missed that since October 2008, every negative queue news coming from the U.S. and from Europe had even worst impact on our region. We had financial crisis, dramatic decrease in GDP consumption. We saw continues decreased in TV ad spending which amounted to $500 million.
We saw almost no government stimulus, high budget deficit, high unemployment and now our big spending cost and deprecation of our currency against U.S. dollar. Prices in America affected our region. Prices in Western Europe affected our region. Prices in Greece and Southern Europe affected our region, prices in any given country of our region is perceived as regional.
The real prices for us today is the prices of confidence and the capability of our region to catch up with Western Europe. We understand this feeling among investors and vendors. Being here for so many years, fighting with the crisis we feel today as confident in our future as would be two years ago. During the multiple shockwaves we did what we had to do. We invested in our people and product, repositioned our business, focused on a leadership and increased our market share. We prove that we are capable to perform better than our market. TV ad spending in 2010 did not match our expectations for recovery, therefore the whole year will be challenging.
Finally two of our market started growing Czech Republic and Slovenia. We expect continues improvement in this two markets and the possible restart of spending in the fourth quarter in Slovenia, Slovakia and Croatia. We had limited expectation for Romania and Bulgaria this year.
Overall the second half of the year will show positive trend but the take off will be slow. It is an near of ups and down. But we see second quarter as the beginning of recovery and now over to David who will give you an overview of quarter two macro economic indicators and our consolidated performance.