Market Overview

Central European Media Enterprises Ltd. Reports Results for the Third Quarter and Nine Months Ended September 30, 2019

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THIRD QUARTER

- Net revenues increased 1% at actual rates and 7% at constant rates to US$ 138.9 million -

- Operating income increased 39% at actual rates and 49% at constant rates to US$ 30.8 million -

- OIBDA increased 16% at actual rates and 23% at constant rates to US$ 41.4 million -

NINE MONTHS

- Net revenues decreased 1% at actual rates but increased 6% at constant rates to US$ 469.0 million -

- Operating income increased 23% at actual rates and 32% at constant rates to US$ 118.9 million -

- OIBDA increased 16% at actual rates and 24% at constant rates to US$ 152.8 million -

Central European Media Enterprises Ltd. ("CME" or the "Company") (NASDAQ/Prague Stock Exchange - CETV) today announced financial results for the three and nine months ended September 30, 2019.

Year-to-date operational and financial highlights:

  • TV advertising revenues decreased 3% at actual rates, but increased 4% at constant rates.
  • Carriage fees and subscription revenues increased 4% at actual rates and 11% at constant rates.
  • Costs charged in arriving at OIBDA decreased 8% at actual rates and 1% at constant rates.
  • OIBDA margin increased by 490 basis points to 33%.
  • Cash generated from continuing operating activities increased 79% at actual rates to US$ 168.0 million.
  • Unlevered free cash flow increased 25% at actual rates to US$ 170.6 million.
  • After making a EUR 50 million debt payment in September, CME has repaid a total of EUR 150 million of debt in 2019 using cash generated by the business.
  • The net leverage ratio declined to 2.5x at the end of September, down from 3.5x at the start of the year.

Michael Del Nin, Co-Chief Executive Officer, commented: "We head into the final months of 2019 with another outstanding set of results that improve our outlook, leading us to raise our OIBDA guidance for the third time this year. The ability of the business to generate increasing amounts of cash remains impressive, driving further deleveraging and enabling us to repay additional debt. In fact, with another payment in the third quarter, we have now repaid more than half a billion dollars of debt in the last two years."

Christoph Mainusch, Co-Chief Executive Officer, added: "We saw a very successful start to the fall season, resulting in higher prime time audience share in each of our country operations during the quarter, and widening our lead over our nearest competitor in three segments. On the strength of that audience performance, we grew TV ad market share in four countries, led by the Czech Republic, which continued to deliver impressive results."

In this release we refer to several non-GAAP financial measures, including OIBDA, OIBDA margin, free cash flow, unlevered free cash flow and constant currency percentage movements. Please see "Non-GAAP Financial Measures" below for additional information, including definitions and reconciliations to US GAAP financial measures.

Consolidated results for the three months ended September 30, 2019 and 2018 were:

(US$ 000's, except per share data)

For the Three Months Ended September 30,

(unaudited)

2019

 

2018

 

% Actual

 

% Lfl (1)

Net revenues

$

138,851

 

 

$

137,038

 

 

1.3%

 

7.3%

Operating income

30,783

 

 

22,197

 

 

38.7%

 

48.7%

Operating margin

22.2

%

 

16.2

%

 

6.0 p.p.

 

6.2 p.p.

OIBDA

41,411

 

 

35,767

 

 

15.8%

 

23.2%

OIBDA margin

29.8

%

 

26.1

%

 

3.7 p.p.

 

3.8 p.p.

Income from continuing operations

13,522

 

 

10,609

 

 

27.5%

 

38.6%

Income from continuing operations per share - basic

0.04

 

 

0.03

 

 

28.2%

 

39.4%

Income from continuing operations per share - diluted

$

0.04

 

 

$

0.03

 

 

28.0%

 

39.2%

Consolidated results for the nine months ended September 30, 2019 and 2018 were:

(US$ 000's, except per share data)

For the Nine Months Ended September 30,

(unaudited)

2019

 

2018

 

% Actual

 

% Lfl (1)

Net revenues

$

469,009

 

 

$

475,655

 

 

(1.4)%

 

5.7%

Operating income

118,882

 

 

96,795

 

 

22.8%

 

32.1%

Operating margin

25.3

%

 

20.3

%

 

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