OREANDA-NEWS. May 07, 2008. CTC Media, Inc. (NASDAQ: CTCM), a leading television broadcaster in Russia, reported financial results for the three month period ended March 31, 2008, reported the press-centre of CTC Media.

Financial Highlights
Consolidated revenue increased 31% to \\$136,7 million

Advertising revenue in Russia increased by 38% to \\$134,4 million

OIBDA increased 25% to \\$55,2 million, OIBDA margin of 40,4%

Net income increased 48% to \\$41,7 million

\\$0.26 fully diluted earnings per share, an increase of 46%

First Quarter Operational Highlights
Entered into definitive agreement to acquire the DTV group, which operates a national free-to-air television network and a group of 24 owned-and-operated stations in Russia — closed the acquisition in April 2008;

Re-launched Channel 31 in Kazakhstan with a new schedule, programming and brand image;

Turned our CTC unmanned repeater in Petrozavodsk into an owned-and-operated station to gain access to local advertising market; and

Received ‘BB-’ long-term corporate credit rating with stable outlook from Standard & Poor’s.

Alexander Rodnyansky, Chief Executive Officer, commented, “We are extremely satisfied with the first quarter financial results, which once again proves that CTC Media continues to strengthen its position as the leading independent media company in Russia. The increase in our total operating revenue in the first quarter by 31% and especially the increase in our advertising revenue in Russia by 38% in the same period represent the best example of CTC effectively capitalizing on the growth of the Russian advertising market. In the increasingly fragmented free-to-air environment, CTC Media continues to deliver quality programming to its target audience, while the high affinity of our channels in Russia allows us to deliver a premium, loyal audience to advertisers.

“We continued to successfully execute on our growth strategy. We started commercial broadcasting of CTC-Uzbekistan and re-launched Channel 31 in Kazakhstan in the CTC format. The first several weeks of broadcasting in Kazakhstan proved to be tremendously successful, and we believe we are well positioned to further strengthen our position with Kazakh viewers and in the overall market in the years ahead.

“Another important milestone was entering into the definitive agreement to acquire the DTV group, with the subsequent closing of the deal in April 2008. As a result, CTC Media currently operates three free-to-air national TV channels in Russia, allowing us to provide a unique offer to advertisers and audiences. We are focused on improving DTV’s programming line-up for the fall television season which we believe will make the channel even more attractive to its premium male audience.

“We are off to a terrific start in 2008. Our management team and employees are focused on executing our strategic plan, and we are positioned to continue to benefit from the strong growth of the Russian and CIS markets. We are prudently executing on a number of growth initiatives that will diversify our business, broaden our market exposure and seek to create additional value for shareholders.”

Results for the Three Months Ended March 31, 2008
CTC Network’s first quarter 2008 audience share was 8,8% as compared with 9,3% in the first quarter of 2007. CTC Network audience share in its target demographic (everyone aged 6-54) of 11,4% in the first quarter of 2008 compared to 11,5% in the first quarter of 2007 demonstrating CTC’s increased affinity. CTC remains the fourth most watched broadcaster in Russia overall. Domashny’s audience share demonstrated healthy growth from 1,9% in the first quarter of 2007 to 2,3% in the first quarter of 2008. Domashny Network audience share in its target demographic (females aged 25-60) of 2,9% was up from 2,3% in the first quarter of 2007.

CTC Media’s total operating revenue for the three months ended March 31, 2008 increased 31,3% to \\$136,7 million from \\$104,1 million for the three months ended March 31, 2007. CTC Media’s total operating revenue includes advertising revenue in Russia that increased 37,6% in the three months ended March 31, 2008 to \\$134,4 million from \\$97,7 million in the year ago period. The increase in revenues reflects the continued growth of the Russian television advertising market and higher advertising rates driven in part by a reduction of airtime available for advertising (i.e. reduction of inventory available for sale) in Russia starting January 1, 2008.

Consolidated total operating expenses in the first quarter of 2008 increased by 27,6% and amounted to \\$83,7 million compared to \\$65,6 million in the first quarter of 2007. Total operating expenses decreased as a percentage of revenue by 1,8% period-on-period. In absolute terms, total operating expenses primarily went up due to increased programming amortization expense, which was driven by higher programming costs, particularly for foreign movies and Russian-produced content, and increase in impairment charges.

Impairment charges increased from \\$0,7 million to \\$5,1 million, when comparing the three months ended March 31, 2007 and 2008, due to a one-off charge related to relative underperformance of two Russian series launched in the first quarter of 2008. The increase in operating expenses driven primarily from increased programming amortization expense was offset by a \\$3,6 million decrease in depreciation and amortization expense principally caused by a change in the way in which we account for our broadcasting licenses. As of January 1, 2008, we no longer amortize broadcasting licenses over a 5-year useful life but treat them as intangible assets with an indefinite life and test them annually for impairment.

OIBDA increased 24,7% to \\$55,2 million for the first quarter of 2008 compared to \\$44,3 million in the first quarter of 2007. The OIBDA margin for the quarter was 40,4%, compared to 42,5% for the corresponding quarter of 2007.

Net income for the quarter was \\$41,7 million compared to \\$28,1 million for the three months ended March 31, 2007. Fully diluted income per share was \\$0,26 for the three months ended March 31, 2008, compared to \\$0,18 for the three months ended March 31, 2007.

Guidance
For the full year ending December 31, 2008, the Company reconfirms its guidance for consolidated total operating revenue in the range of \\$600 to \\$650 million, with a consolidated OIBDA margin in the range of 45-48%. This guidance range does not include expected revenues and OIBDA contribution from our CIS operations in Kazakhstan and Uzbekistan. The Company expects CIS operations to generate 2-3% of the CTC Media Group consolidated 2008 revenue. This guidance range also does not include expected revenues and OIBDA contribution from the recently acquired DTV network.