Central European Media Enterprises Ltd. Reports Results for the First Quarter Ended March 31, 2018 April 26, 2018
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- Net revenues increased 25% at actual rates and 7% at constant rates to US$ 139.2 million -
- Operating income increased 61% at actual rates and 43% at constant rates to US$ 20.9 million -
- OIBDA increased 45% at actual rates and 26% at constant rates to US$ 30.7 million -
ANNOUNCES DEBT REPRICING, REDUCED BORROWING COST AND IMPROVED MATURITY PROFILE
WILL REPAY EUR 110.0 MILLION OF DEBT WITH PROCEEDS FROM NEWLY EXERCISED WARRANTS
HAMILTON, Bermuda--(BUSINESS WIRE)-- Central European Media Enterprises Ltd. ( CME or the Company ) (NASDAQ/Prague Stock Exchange - CETV) today announced financial results for the three months ended March 31, 2018.
Following the previously announced agreement to sell our Croatia and Slovenia operations, these businesses are classified as held for sale and presented as discontinued operations for all periods. The discussion in this release relates to our continuing operations in the four remaining operating segments.
Operational and financial highlights:
TV advertising revenues increased 26% at actual rates and 7% at constant rates.
Carriage fees and subscription revenues increased 23% at actual rates and 8% at constant rates.
OIBDA increased 45% at actual rates and 26% at constant rates, resulting in OIBDA margin expansion to 22% from 19%.
The increase in OIBDA improved operating income 61% at actual rates and 43% at constant rates.
Unlevered free cash flow for the three months ended March 31, 2018 increased 37%.
The improvement in our operations reduced our net leverage ratio to 4.8x at the end of the quarter. Following the agreed debt repricing, our cost of borrowing will decrease by nearly 200 basis points to about 4.0% beginning in May 2018.
On April 25, 2018, Time Warner exercised 100,926,996 warrants and we will apply the proceeds of US$ 100.9 million, along with excess cash on hand, to repay EUR 110.0 million of the outstanding principal balance of the 2018 Euro Term Loan.
Proceeds from the sale of our operations in Croatia and Slovenia, which we expect to close in the second quarter subject to remaining regulatory approvals and other customary closing conditions, will be used to repay debt, and together with the agreed repricing would decrease our cost of borrowing by an additional 80 basis points to approximately 3.2%.
Michael Del Nin, Co-Chief Executive Officer, commented: Today's series of announcements bode very well for the future of CME. Firstly, the financial results for Q1 represent our strongest start to any year in a decade. The increase in profitability and cash flow generation in the quarter have helped drive down our leverage ratio and, when paired with the proceeds from warrants that have now been exercised, allow us to complete another key step in our ongoing deleveraging plan. But just as importantly, the new refinancing transactions, which address the maturity profile of our debt and significantly cut our borrowing costs to record lows, put in place the capital structure that we need for the exciting next phase of the company's future.
Christoph Mainusch, Co-Chief Executive Officer, added: We won the prime time grid in each country nearly every night during the quarter, which contributed to significant revenue growth. Our channels provide extensive reach for advertisers because they continue to be the most popular source of news and entertainment in our countries. We will invest in local content, while focusing on controlling costs overall, and remain market leaders in our territories.
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 March 31, 2018 and 2017 were:
(US$ 000s, except per share data) For the Three Months Ended March 31,
(unaudited) 2018 2017 % Actual % Lfl (1)
Net revenues $ 139,182 $ 111,732 24.6% 6.8%
Operating income 20,945 13,024 60.8% 43.3%
Operating margin 15.0% 11.7% 3.3 p.p. 3.8 p.p.
OIBDA 30,667 21,092 45.4% 26.4%
OIBDA margin 22.0% 18.9% 3.1 p.p. 3.4 p.p.
Income / (loss) from continuing operations 6,084 (5,982) NM (2) NM (2)
Income / (loss) from continuing operations per share - basic 0.01 (0.05) NM (2) NM (2)
Income / (loss) from continuing operations per share - diluted $ 0.01 $ (0.05) NM (2) NM (2)
(1) % Lfl (like-for-like) variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs.
(2) Number is not meaningful.
Teleconference and Audio Webcast Details
CME will host a teleconference and audio webcast to discuss its first quarter results on Thursday, April 26, 2018 at 9 a.m. New York time (2 p.m. London and 3 p.m. Prague time). The audio webcast and teleconference will refer to presentation slides which will be available on CMEs website at www.cme.net prior to the call.
To access the teleconference, U.S. and international callers may dial +1-323-701-0225 ten minutes prior to the start time and reference passcode 7296178. The conference call will also be audio webcasted via www.cme.net. It can be heard on iPads, iPhones and a range of devices supporting Android and Windows operating systems.
A digital audio replay of the webcast will be available for two weeks following the call at www.cme.net.
Forward-Looking and Cautionary Statements
This press release contains f
