Romania brings biggest net revenue growth for media group CME, remains one of few profitable markets in the region

Media group Central European Media Enterprises Ltd., the owner of ProTV channel in Romania, managed to increase its net revenues in the country by USD 1 million in the first six months of the year, to some USD 96 million. On the profit side however, CME recorded decreases across the board, but expects a return of profitability after the declining trend of TV advertising spending will reverse in the fall of 2013 building on its pricing initiatives. The second quarter of the year mainly contributed to the growth in net revenues in Romania, with USD 2 million extra net revenues compared to the same period of 2012. CME reported USD 54 million in net revenues in Romania during the second quarter of the year, making it the first quarter of net revenues growth after plummeting sales throughout 2012. At six months, Romania was the only country among CME's markets to post year-on-year growth, while the business in Croatia stayed flat, and net revenues dropped elsewhere in Bulgaria, the Czech Republic, The Slovak republic and Slovenia. In the second quarter of the year, Croatia was the only other market where CME managed to up its revenues. On the profit side however, CME still recorded a decrease, both for the second quarter, and for the first six months. The unaudited OIBDA profit (Operating income before depreciation and amortization) in the first six months was of USD 8.9 million in Romania, down from USD 10.6 million in the same period of 2012, while for the second quarter, the drop was from USD 9.4 million, to USD 7.9 million. Romania was however among the four countries where CME posted a profit after six months, unlike the Czech Republic and the Slovak Republic, where CME posted a loss of USD 6.5 million, and USD 4.1 million, respectively. The media company took a nosedive in these two countries at six months, especially in the Czech Republic, where it recorded a USD 54 million profit in the first half of 2012. “We raised carriage fees in Romania and Bulgaria which for the coming years are expected to more than double compared to 2012. We also repurchased EUR 206 million of debt with proceeds from our successful equity offerings during the quarter. Our products are performing better than last year,” said Romanian Adrian Sarbu, President and Chief Executive Officer of CME, and founder of ProTV (in picture). He also explained the poor results in the Czech Republic by saying that “certain key advertisers have only recently accepted our higher prices.” Overall, CME posted a loss of USD 150 million in the first six months, out of which USD 41 million in the second quarter. The group reported net revenues of USD 317 million in the first half of 2013, down from USD 378 million in the same period of 2012. CME is a media and entertainment company operating in six Central and Eastern European markets with a total population of approximately 50 million people. In Romania, CME runs PRO TV, PRO TV International, Acasa, Acasa Gold, PRO Cinema, Sport.ro, MTV Romania and PRO TV Chisinau Moldova. The company also has broadcast operations in Bulgaria, Croatia, the Czech Republic, Slovakia and Slovenia. Across the region CME operates the video-on-demand service Voyo. The company is traded on the NASDAQ Global Select Market and the Prague Stock Exchange.