Bloomberg News

Central European Media Is ‘Comfortable’ With Full-Year Estimates

October 21, 2011

Oct. 21 (Bloomberg) -- Central European Media Enterprises Ltd., the east European broadcaster partly owned by Time Warner Inc., is “comfortable” with full-year analysts’ estimates, Chief Executive Officer Adrian Sarbu said.

“We’re comfortable with market expectations of $850 million in revenue and operating income before depreciation and amortization of $166 million,” Sarbu said late yesterday in an interview at the company’s premises in Prague.

Central European Media, or CME as the company is known, has been battling a slower-than-expected pick up in advertising spending in all its markets as the economies in the region emerge from recession. The Hamilton, Bermuda-registered broadcaster posted a second-quarter profit of $812,000 on July 27, compared with a loss of $52.9 million a year earlier.

“We don’t see changes in the pattern of spending of advertisers for October and we don’t expect them in the fourth quarter,” Sarbu said. Overall television advertising spending across all six CME’s markets grew 1 percent in the third quarter, the executive said.

‘Single Digit’

The Czech market recorded “single digit” growth in the period, while markets like Romania and Bulgaria didn’t recover in the quarter.

CME operates TV channels in the Czech Republic, Bulgaria, Romania, Croatia, Slovakia and Slovenia. After dropping unprofitable assets in Ukraine in 2010, it agreed to acquire a Bulgarian channel. It also bought Bontonfilm AS, a Czech distributor of movies, for $11 million.

Time Warner Inc. purchased a 31 percent stake in the broadcaster for $241.5 million in May 2009, with the agreement that Ronald Lauder, CME’s founder and non-executive chairman, will control Time Warner’s voting rights in the company for at least four years. Time Warner increased its stake to 34.4 percent on March 3.

Sarbu would not comment whether CME may participate in a purchase of Poland’s TVN SA’s assets. Dziennik Gazeta Prawna reported on Oct. 17 that Time Warner and Vivendi SA are bidding to buy 56 percent in Polish broadcaster from ITI Holdings SA.

Central European Media is scheduled to report third-quarter earnings on Oct. 26.

--Editors: Douglas Lytle, James M. Gomez

To contact the reporter on this story: Lenka Ponikelska in Prague

To contact the editor responsible for this story: James M. Gomez at

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