Cyrrus (Cyrrus)
Czech markets  |  February 26, 2013 11:54:37

CME: prediction results for 4Q 2012 - we expect a 10 percent decline in sales

Media company CME, in our opinion, investors again especially pleasing prospects for this year. 4th quarter, we expect revenue of $ 250 million USD, which would imply a nearly 10% decline. The greatest deterioration of performance in USD terms, we expect the Czech market, where, according to our estimates, sales fell year on year by 16.3%. Due to the fact that the Czech Republic make up about 31% of sales, and news from Nova TV advertisers are not optimistic, the year 2013 will be according to our estimates for CME difficult.

Growing segments should be again only New Media and Media Pro Entertainment. With new media, we expect annual growth of 7%, Media Pro Entertainment should reach growth of external sales of about 20%. The share of these two promising segments in total sales increased from 8.6% in 2011 to 12.2% in 2012, which we consider the way the right direction.

Main operating EBITDA in our model reaches 72.6 million USD, ie -9.2% y / y with an EBITDA margin of 29%. Operating income in our view, a single negatively impacted by write-off of goodwill. This company likely to join (as Q4 2011). But due to revisions to management that management has made in the course of the year, we think that the goodwill will be more pronounced this time. In our model, we expect depreciation of USD 150 miles, but the range can be between 50 to 200 million USD.This should lead to a net loss of $ 142.6 million.

One of the points of the conference call should be a complicated situation in TV Nova. In recent weeks, there is information that many of major advertisers refuses to sign the contract in 2013 because prices sometimes also tens of percent higher than in 2012. TV Nova argues that prices are higher, they are only applied discounts. Effectively, however, it really means a significant increase in the price at which management takes, because some companies moving to the competition. Given the importance of TV Nova throughout the company consider this "scandal" as serious.

Another important point is the share of the largest shareholders of Time Warner. This ends in May 2013 agreement with another major shareholder of R.Lauderem nenavyšování share. We expect that after the expiration of this agreement will increase Time Warner's share of over 50%.This would be incorporated into CME Time Warner, which it could use its own resources to the acquisition of certain tranches of bonds CME. The whole transaction is likely to lead to significantly cheaper financing for existing shareholders but it might not necessarily be positive. If Time Warner increased its stake through the issue of new shares of CME that are currently at very low prices, for existing shareholders, this dilution could have a significant negative effect.

The whole prediction results for download here

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CME: predikce výsledků za 4Q 2012 - čekáme 10procentní pokles tržeb

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