CME profit up despite revenue drop

Broadcaster Central European Media Enterprises (CME) increased its profit by more than 280% in the second quarter of 2012, boosted by its in-house production arm and online video platform Voyo.

CME posted net revenue for the three months to June 30 of US$211.2m, down 15.4% compared with US$249.7m the previous year. Its broadcast division’s revenue fell 20.4% from US$229m in Q2 2011 to US$182m.

However, CME prodco Media Pro Entertainment saw a 4.3% increase in revenue from US$51.3m to US$53.5m. And its new media division, including Voyo, saw a 13% rise from US$4.6m to US$5.2m.

This led to a net income for the quarter of US$3.1m, an increase of 282% on US$812,000 for the same period last year.

For the first half of 2012, CME said net revenue was US$378.7m compared with US$422.4m for the same period in 2011, down 10.4%. However, its net loss improved to US$10.7m, compared with US$20.1m for the same period in 2011, a 46.8% reduction.

During Q2 2012, CME reduced its debt by US$184.8m by giving stock to shareholders including Time Warner as payment for outstanding loans.

Adrian Sarbu, CME’s president and CEO, said: “By July 3, we had completed transactions with our major shareholders, Time Warner and Ronald Lauder, that reduced our debt by US$185m.

“Despite a 7% decline in advertising spending for the first half, our revenues year-on-year were flat in constant currencies, driven by growth in Media Pro Entertainment and new media, where Voyo became a leader in the subscription video-on-demand segment.”

In the second half, CME will continue to focus on “de-leveraging, maintaining our leading audience and market shares, expanding non-advertising revenues, and delivering positive free cashflow,” he added.

CME has television operations in six Central and Eastern European countries, including BTV in Bulgaria, TV Nova in the Czech Republic and Pro TV in Romania.