CEO of TV Nova provided interview to Bloomberg, where he commented on several issues. He sees the ad market in Czech Republic to increase by 56% over the period of five to seven years, supported by economic growth and foreign-owned companies present there. He admitted that TV Nova’s market share on TV ad spending could decline on year-on-year comparison although it is well placed with its ratings in prime time to benefit from the growth of the market. Current ratings in the prime time are between 42 to 45% which is optimal and is not necessary to invest more to improve it.
Digital broadcasting could bring specialized channels as sport, movie or soap opera. However he reiterated TV Nova sees 2010 deadline to switch from analogue to digital as challenging and doesn’t expect signal coverage and set-top boxes penetration among people as sufficient.
Our view:
Interview didn’t bring any new information and although the ad market should grow significantly in longer term, no changes in the earnings guidance were released as this growth is already factored in. Therefore we don’t see any reason that could change our fair value estimate of USD 79 and reiterate our Buy recommendation.