RBC Posts Q4 and Full Year 2010 Results
OREANDA-NEWS. April 15, 2011. RBC OJSC reported its unaudited consolidated financial results for 2010.
“In 2010, RBC continued to strengthen its position on the Russian media market and returned to the growth of revenue and business profitability. In only four months following the successful completion of the debt restructuring, the company’s EBITDA reached the break-even point and RBC laid the groundwork for a significantly greater top-line and earning power growth in
“In December, RBC’s Board of Directors determined the company’s top-priority areas of business expansion until 2013. The business strategy focuses on maximizing the business’s efficiency and boosting its investment value,” German Kaplun added.
Revenue breakdown for the fourth quarter (Q4) and the full year 2010
|
RUB ‘m |
Q4 20105 |
Q4 20095 |
Change (%)</i |
|
Internet6 |
729 |
542 |
35% |
|
Television |
201 |
178 |
13% |
|
Print media |
307 |
224 |
37% |
|
- Business titles7 |
129 |
69 |
87% |
|
- Salon Press |
178 |
155 |
15% |
|
Total revenue |
1 237 |
944 |
31% |
|
RUB ‘m |
20015 |
2009 |
Change (%) |
|
Internet6 |
2 096 |
1 808 |
16% |
|
Television |
489 |
396 |
23% |
|
Print media |
893 |
844 |
6% |
|
- Business titles7 |
324 |
252 |
29% |
|
- Salon Press |
569 |
592 |
-4% |
|
Total revenue |
3 478 |
3 049 |
14% |
Revenue and EBITDA. The company’s total revenue advanced 31% year-on-year in Q4 and 14% for the full year, reaching RUB 3,478m in 2010. The sharp rise in revenue in the fourth quarter is attributable to the completion of the debt restructuring process in early September. It was also driven by a recovery of the Russian advertising market and segments in which RBC’s clients operate. As a result, RBC managed to secure additional advertising budgets in late 2010, as well as signed new contracts with advertisers and agencies for 2011. Consequently, the company restored revenue growth in all three business areas in 2010.
RBC’s EBTIDA was back in the black in 2010 due to the effect from the company’s reduction of operating expenses in 2009 against the background of revenue growth. RBC achieved an EBITDA of RUB 176m (without the impact of debt restructuring costs) in 2010.
Internet. Total revenue from the Internet segment climbed 35% y-o-y in Q4 and 16% for the full year to RUB 2,096m. The rise in the revenue was driven by higher advertising sales in Q4 and sustainable demand for RBC’s services, whereas ad budgets spent on RBC and revenues from Internet value-added services grew thanks to further expansion of the user base of RBC’s Internet resources.
In 2010, the total audience of RBC’s Internet resources rose 21% to 52.2m users. The Russian audience went up 14% to 20.1m users, which places RBC among Russia’s top four Internet companies.
RBC re-designed Rbc.ru website and enhanced its financial sections during the year in order to further boost its audience and make use of additional advertising opportunities. New versions of Rbcdaily.ru and Rbctv.ru websites were launched. The revised newspaper’s website features an expanded range of news reports and functional capabilities, while Rbctv.ru has become more informative and interactive. Both websites are integrated into major social networks.
Last year the key non-business resources of RBC were consolidated into Qip.ru. As a result, the user base of Qip.ru nearly doubled to 20.4m users. The total audience of the company’s non-business resources exceeded 48m users in 2010.
In September, RBC acquired a 25% stake in one of the largest online hotel and flight booking portals iGlobe.ru, which is a partner of Expedia Affiliate Network. In November, RBC launched an online real-time auction system to sell and lease luxury real estate - BidontheCity
To ramp up sales and expand the client base primarily from the FMCG sector, RBC reached an agreement with a leading media seller in the Russian-language Internet, IMHO VI (a company of Video International Group) to sell advertising space on Rbc.ru, Rbcdaily.ru, Autonews.ru, Quote. ru, Utro.ru, Cnews.ru, Tata.ru and Style.rbc.ru. IMHO VI has the exclusive right to sell one banner space on the home pages of all above-mentioned websites starting February 15, 2011.
Television. RBC-TV’s revenue went up 13% in Q4 and 23% for the full year to RUB 489m. The above-market revenue growth is attributable to an increase in the channel’s sell-out ratio thanks to a pick-up in advertising activity during 2010.
In 2010, the renovation of RBC-TV’s graphic design got under way. To make the channel more popular and expand its advertising opportunities, new television projects were added, and to enhance its interactivity an upgraded version of Rbctv.ru website was launched.
In the reporting period, RBC-TV expanded its partnership network to transmit its signal in
RBC-TV was awarded a prize at the Russian business journalism competition for unbiased and full coverage of economic events.
Print media. The revenue of RBC’s publishing segment increased 37% in Q4 and 6% for full year 2010 reaching RUB 893m. The growth of revenue was driven mainly by RBC’s business titles, as the recovery of the real estate market that began in 2010 translated into revenue growth from interior design magazines only in the second half of the year.
Revenue from business titles rose 29% in 2010 to RUB 324m. In Q4, it jumped 86% year-on-year thanks to, among other reasons, a 10% increase in advertising placement prices effective October 2010. Revenue from Salon Press publishing house went up 15% year-on-year in Q4. Revenue generated for the full year 2010 totaled RUB 569m.
According to a survey, conducted by TNS, the average issue readership (AIR) of the RBC Daily business newspaper in
The AIR of the RBC monthly business magazine in
Interior design magazines retained leading positions in their respective niches. According to TNS, the AIR of Idei Vashego Doma (Ideas for Your Home) reached 1.93m readers and the AIR of Salon Interior stood at 722,400 readers in
Deal with ONEXIM Group and RBC’s debt restructuring. In June 2010, the company closed a deal with ONEXIM Group involving the acquisition of 51% in a new holding company of the group – RBC-TV Moscow - through an additional share issue worth USD 80m. The proceeds raised from the transaction were used for the debt restructuring, financing the company’s day-to-day operations, and funding its programs for further development. Representatives of ONEXIM Group took seats on RBC’s Board of Directors. Specifically, Sergey Lavrukhin, Executive Director of ONEXIM Group, was elected Chairman of the Board of Directors.
The remaining 49% stake in RBC OJSC is subject to a share exchange for 100% of shares in RBC Information Systems OJSC. In late 2010, shares of RBC OJSC were listed on the MICEX and RTS stock exchanges under the RBCM ticker. The share exchange began in January 2011.
The debt restructuring process was completed in 2010, resulting in a reduction of RBC’s debt from USD 261m (including accrued interest) to USD 210m as of the end of the reporting year. The company’s restructured debt consists of five-year bonds with an interest rate of 7% (with a biannual coupon) and eight-year bonds with an interest rate of 6% (with a biannual coupon paid after five years from the placement). RBC paid the first coupon on five-year bonds in the amount of USD 4.5m in November 2010.
Development strategy and outlook for 2011. According to the strategy adopted by RBC’s Board of Directors in December 2010, the Internet and television will continue to be the company’s primary focus, as RBC has strong competitive advantages and maximum growth potential in these segments. In order to ensure high growth rates, the company plans to go back to the business development model that combines organic growth with an M&A strategy. At the same time, RBC will sell its non-core assets which are of no strategic interest to the company.
According to a preliminary forecast and the 2011 budget, a consolidated revenue growth is estimated at approximately 30%. The Internet segment is expected to deliver the highest growth. At the same time, the company’s expenses are expected to rise moderately.
As an additional measure aimed at boosting the company’s investment appeal, in addition to improving the quality of corporate governance, RBC’s Board of Directors has decided to explore the possibility of seeking a listing for RBC on a foreign stock exchange.
Cautionary note regarding forward-looking statements Some of the information in this press release may contain statements of future expectations and other forward-looking statements. These expectations are based on the management's current views and assumptions, and involve known and unknown risks and uncertainties. It is possible that the company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the company's future results, see “Risk Factors” in the company’s latest Annual Report on www.rbcholding.com. RBC assumes no obligation to update any forward-looking information contained in this document.
1 - Internet audience statistics in the press release are based on TNS research
2 - Until March 2011, the company’s name was RBC-TV Moscow OJSC
3 - Based on management accounts prepared in accordance with IFRS (unaudited)
4 - Does not include restructuring costs of RUB 62m in 2009 and RUB 91m in 2010
5 - Based on management accounts prepared in accordance with IFRS (unaudited)
6 - Online advertising, VAS and marketing communications
7 - Business titles include RBC Daily newspaper , RBC, Nashi Dengi and CNews magazines
8 - In March 2011, the company was renamed RBC
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