OREANDA-NEWS. CTC Media will announce 2Q10 results on Thursday, 5 August. The conference call will be held at 2pm London time (5pm Moscow). The dial-in number for the UK is +44 (0)20 7806 1953, reported the press-centre of OTKRITIE Financial Corporation.

View: We anticipate respectable YoY growth, but we do not expect results to be stellar. While sellout is up, prices still remain at lower levels than a year ago. An impressive 37% YoY increase in gross ratings points (“number of eyeballs”) sold on the Domashny channel was partially overshadowed by a slip in quarterly ratings on the flagship CTC channel, on which advertising is more expensive. On the whole, we expect quarterly revenue to increase 10% YoY, including an approximately 6% boost from the stronger ruble. On the costs side, this year CTC is increasing investment in programming for its smaller channels, which we expect to cut into its EBITDA margin. We are more conservative than consensus, but we expect Q2 to be the peak of costs for the year.

Valuation: CTC Media trades on a 2011 EV/EBITDA of 9.9x.

Action: The stock has been fairly strong ahead of the numbers, in line with the market. We remain buyers of CTC, and would view any weakness following the results announcement as a buying opportunity.  We will, however, also be paying close attention to the anticipated update on CTC’s sales strategy for 2011.