CTC Media Announced Financial Results for 1Q 2010

OREANDA-NEWS. May 6, 2010. CTC Media, Inc. (“CTC Media” or “the Company”) (NASDAQ: CTCM), Russia’s leading independent media company, announced its unaudited consolidated financial results for the first quarter ended March 31, 2010.

*OIBDA is defined as operating income before depreciation and amortization (excluding amortization of programming rights and sublicensing rights).
**OIBDA margin is defined as OIBDA divided by total operating revenues. Both OIBDA and OIBDA margin are non-GAAP financial measures. Please see the accompanying financial tables at the end of this release for a reconciliation of OIBDA to operating income and OIBDA margin to operating income margin.
***Net cash position is defined as cash, cash equivalents and short-term investments less interest bearing liabilities.

FINANCIAL HIGHLIGHTS

• Total revenues of USD 123.2 million – up 3% year-on-year in ruble terms
• Russian advertising revenues up 4% year-on-year in ruble terms
• Total operating expenses up 12% year-on-year in ruble terms
• Fully diluted earnings per share of USD 0.16 (Q1 2009: USD 0.15)
• Net cash position of USD 76.2*** million at end of the period
• USD 0.065 per share second installment of 2010 cash dividend to be paid on June 30, 2010 to stockholders of record as of June 1, 2010

OPERATING HIGHLIGHTS

• Average combined 4+ audience share in Russia up year-on-year from 12.4% to 13.0%
• Target audience shares up year-on-year for CTC and Domashny networks
• Successful introduction of CTC-international following its North American launch in December 2009
• Sale of 100% interest in Kazakh radio station for USD 2.0 million in cash in January 2010

Anton Kudryashov, Chief Executive Officer of CTC Media, commented: “The Russian TV advertising market has stabilized and is growing again, which reflects the increasing demand from domestic and international advertisers. Our 18% year-on-year reported advertising revenue growth in US dollar terms in the first quarter reflects the efficient monetization of substantially increased target audience shares for our CTC and Domashny channels, with continued high power ratios, as well as favorable currency exchange rate movements. We have also reported a 24% year-on-year increase in our US dollar sublicensing and own production revenues, and our CTC-international channel has made an encouraging start in the US market. As anticipated, we have increased our investments in the programming schedules and network coverage of our DTV and Domashny channels, in order to drive up their audience and market shares, but we have still delivered an OIBDA margin of over 32% in the seasonally weak first quarter period. We have used part of our cash flows to make the first of our intended 2010 dividend payments and to repay all of our outstanding debt. As before, we are also increasing our capital expenditure levels to move our digital play-out facility and headquarters to a single location in Moscow, to create a back-up facility at our existing location, and to continue the ongoing digitalization of our content library and upgrading of our broadcasting equipment. Approximately 90% of our forecast full year 2010 Russian national inventory has now already been booked under forward contracts and the pricing environment is improving. We are also continuing to review all of our options following the changes in Russian legislation regarding advertising sales, and we see potential opportunities to increase sales efficiency and transparency levels moving forward.”