Broadcaster CME posts jump in second quarter core profit, cuts debt

Broadcaster CME posts jump in second quarter core profit, cuts debt
By Reuters

PRAGUE (Reuters) – Broadcaster Central European Media Enterprises (CME) <CETV.O> <CETV.PR> beat forecasts with a 20.5% rise in second-quarter core profit and further reduced its debt, it said on Tuesday. CME’s operating income before depreciation and amortisation (OIBDA) increased to $73.3 million (£58.8 million ), above the average estimate of $67.3 million in a Reuters poll. Its OIBDA margin grew to 39.9% from 33.4% a year earlier.

Revenue was in line with expectations at $183.6 million, up 7.9% at constant exchange rates in CME’s five central and eastern European markets due to growth in advertising markets but flat in actual terms.

CME said the quarterly growth at constant rates was its best in four years. It forecasts OIBDA to grow 12-14% in 2019 at constant rates.

CME also paid down 100 million euros of debt in the first half due to higher cash generation.

As CME, majority owned by U.S. group AT&T <T.N>, has grown in recent years, it has reduced a debt pile that once topped $1 billion to a net $665 million at the end of the first quarter.

The company said its net leverage ratio fell to 2.6 times by the end of June, from 3.5 times at the start of the year.

The falling leverage levels have opened the possibility of the company paying its first dividend. However, management appears to be in no rush to return funds to shareholders, especially after launching a strategic review in March that could mean the sale of part or all of the company.

Management has not commented on specific options in the process since its launch.

(Reporting by Jason Hovet; Editing by Kirsten Donovan)

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