CME is to report its 9M05 results before the US market opens. Despite 3Q being seasonally the weakest period, we expect CME’s revenues to show a strong y/y growth, driven in particular by CME’s recent acquisition of TV Nova. CME should consolidate 100% of TV Nova for the three months of 3Q. We expect the annual comparison of operating performance to be distorted by several factors, i.e. the consolidation of the Croatian business (NOVA TV) with negative EBITDA margins, one-off costs associated with the acquisition of TV Nova in the Czech Republic and a USD 35m impairment charge relating to value re-assessment of the Croatian business booked in 2Q. TV Nova should significantly contribute to both CME’s top line and operating level in 3Q. It will be, nevertheless, interesting to see whether the station’s drop in audience share below 40% in 3Q due to the unsuccessful launch of Big Brother will have any impact on the 3Q figures or full year guidance. A conference call will be held on today, November 3 at 4:00pm CET (3:00pm UK). Dial-in number: +1 973 409 9259.
US GAAP consolidated (USD 000s)
9M05E 9M04 change Consensus
Sales 259,172 117,277 121.0% -
Operating cots 53,842 22,464 139.7% -
Costs of programming 103,282 46,829 120.6% -
EBIT 4,891 3,241 50.9%
Pre-tax 23,189 3,228 618.4% -
Net income 16,754 740 2,164.1% -
EPS annualized(fully diluted) 0.84 0.04 2,164.1% -
CME has announced the purchase of 65.5 % of Ukrainian media holding company Ukrpromtorg, which controls the Gravis TV station in Kiev, Channel 7 and other broadcasting assets from Dertus Finance Group Limited for USD 7m. CME has an option to buy another 21.5 % stake. In Ukraine CME already controls the TV channel 1+1, which is ranked second on the market with an audience share of about 20%. The acquisition should strengthen CME’s market position in Ukraine. The Ukraine TV ad market is expected to grow by 35% y/y in 2005, 29% y/y in 2006 and 22% in 2007.
Separately, TV Nova’s (100% owned by CME) ratings increased in week 43 to 38.44% from 37.09% a week earlier, while the ratings of its closest rival, TV Prima, fell to 26.07% from 26.52%.
week 43 week 42
Nova 38.44 37.09
Prima 26.07 26.52
Ct1 22.61 22.38
Ct2 6.64 7.76
other 6.24 6.25