Grupo Radio Centro Reports First Quarter 2005 Results

Grupo Radio Centro Reports First Quarter 2005 Results

MEXICO CITY, April 26 /PRNewswire-FirstCall/ -- Grupo Radio Centro, S.A. de C.V. (NYSE:RC)(NYSE:BMV:)(NYSE:RCENTRO-A) (the "Company"), one of Mexico's leading radio broadcasting companies, announced today its results of operations for the three months ended March 31, 2005. All figures were prepared in accordance with generally accepted accounting principles in Mexico and have been restated in constant pesos as of March 31, 2005.

Due to the termination of the news program previously provided by a third party, which took place on March 3, 2004, the Company was able to increase its productivity, however for the first quarter of 2005, broadcasting revenue was Ps. 106,391,000, representing a decrease of 12.5% compared to Ps. 121,620,000 reported for the same period of 2004. This decrease was mainly due to the loss of revenue from the abovementioned broadcasting news programs, which the Company ceased receiving after the cancellation of these news broadcasts at the end of the first quarter of 2004.

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the first quarter of 2005 were Ps. 86,363,000, representing a decrease of 26.4% compared to Ps. 117,380,000 reported for the same period of 2004. This decrease was mainly attributable to lower production costs resulting from the termination of news programming produced by a third party at the end of the first quarter of 2004.

For the first quarter of 2005, the Company reported broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) of Ps. 20,028,000, an amount which more than quadrupled the broadcasting income of Ps. 4,240,000 reported for the same period in 2004. This increase was mainly attributable to the decrease in the aforementioned Company's broadcasting expenses, which more than offset the reduction in broadcasting revenues.

Depreciation and amortization for the first quarter of 2005 amounted to Ps. 9,735,000, a 60.0% decrease compared to Ps. 24,367,000 reported for the same period of 2004. This decrease was caused by the implementation of a new accounting principle in Mexico (Bulletin B-7 "Adquisicion de Negocios"). As a result, the Company no longer amortizes goodwill as of January 1, 2005, but instead tests goodwill for impairment at least once a year. In accordance with the requirements of Bulletin B-7, the Company performed an analysis for impairment of goodwill as of December 31, 2004 and concluded that no impairment adjustment was necessary. This new Mexican accounting principle is in accordance with U.S. GAAP.

For the first quarter of 2005, the Company's corporate, general and administrative expenses were Ps. 4,284,000, compared to Ps. 7,641,000 reported for the same period of 2004. This 43.9% decrease was due to the discontinuance of expenses previously related to a news production contract that the Company formerly had with a third party, which was terminated at the end of the first quarter of 2004.

The Company reported operating income of Ps. 6,009,000 for the first quarter of 2005, compared to operating loss of Ps. 27,768,000 reported for the same period of 2004. The increase in operating income resulted primarily from (i) the implementation of a new accounting principle that eliminates amortization of goodwill and (ii) a reduction in broadcast expenses, which together more than offset the decrease in broadcasting revenues.

The Company's comprehensive financing cost for the first quarter of 2005 was Ps. 6,144,000, compared to a comprehensive financing cost of Ps. 3,567,000 reported for the same period of 2004. This increase of 72.2% was primarily attributable to (i) an increase in interest expense during the first quarter of 2005 that resulted principally from the Company recording interest relating to a contingent liability provision recorded at the end of 2003, and (ii) a foreign currency exchange loss, net of Ps. 589,000 for the first quarter of 2005 compared to a foreign currency exchange gain, net of Ps. 1,732,000 for the same period of 2004. This was a result of the depreciation of the peso against the U.S. dollar during the first quarter of 2005.

For the first quarter of 2005, other expenses, net, were Ps. 9,033,000, a slight decrease compared to Ps. 10,684,000 reported for the same period in 2004. This decrease was mainly due to the inclusion in other income, of income from a special promotional event of the Company in the first quarter of 2005.

The Company reported a loss before provisions for income tax and employee profit sharing of Ps. 9,168,000 for the first quarter of 2005, compared to a loss before provisions for income tax and employee profit sharing of Ps. 42,019,000 for the same period of 2004.

For the first quarter of 2005, the Company recorded provisions for income tax and employee profit sharing of Ps. 44,000. No provisions for income tax and employee profit sharing were recorded for the first quarter of 2004 primarily due to the loss before provisions reported for that period.

As a result of the foregoing, the Company had a net loss for the first quarter of 2005 of Ps. 9,212,000, compared to a net loss of Ps. 42,019,000 reported for same period of 2004.

Other Matters:

From March 31, 2004 to March 31, 2005, the Company's total bank debt decreased from Ps. 236.1 million to Ps. 169.8 million as a result of scheduled payments.

Company Description:

Grupo Radio Centro owns and/or operates 14 radio stations. Of these 14 radio stations, Grupo Radio Centro operates 11 in Mexico City. The Company's principal activities are the production and broadcasting of musical and entertainment programs, talk shows, news and special events programs. Revenue is primarily derived from the sale of commercial airtime. In addition to the Organizacion Radio Centro radio stations, the Company also operates Grupo RED radio stations and Organizacion Impulsora de Radio (OIR), a radio network that acts as the national sales representative for, and provides programming to, Grupo Radio Centro-affiliated radio stations.

Note on Forward Looking Statements:

This release may contain projections or other forward-looking statements related to Grupo Radio Centro that involve risks and uncertainties. Readers are cautioned that these statements are only predictions and may differ materially from actual future results or events. Readers are referred to the documents filed by Grupo Radio Centro with the United States Securities and Exchange Commission, specifically the most recent filing on Form 20-F, which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements are based on information available to Grupo Radio Centro on the date hereof, and Grupo Radio Centro assumes no obligation to update such statements.

GRUPO RADIO CENTRO, S.A. DE C.V. CONSOLIDATED UNAUDITED BALANCE SHEETS as of March 31, 2005 and 2004 in Mexican Pesos ("Ps.") with purchasing power as of March 31, 2005 (figures in thousands of Ps. and U.S. dollars ("U.S. $")(1)

March 31 2005 2004 U.S. $(1) Ps. Ps. ASSETS Current assets: Cash and temporary investments 3,656 41,290 100,543

Accounts receivable: Broadcasting, net 12,662 143,020 163,728 Other 451 5,096 7,236 Income tax recoverable 1,807 20,410 11,302 14,920 168,526 182,266

Guarantee deposit 0 0 6,009 Prepaid expenses 1,138 12,854 8,020 Total current assets 19,714 222,670 296,838

Long-term accounts receivable 1,264 14,272 0 Property and equipment, net 42,761 482,949 494,422 Deferred charges, net 1,177 13,295 12,684 Excess of cost over book value of subsidiaries 65,525 740,047 790,423 Other assets 285 3,220 3,296 Total assets 130,726 1,476,453 1,597,663

LIABILITIES Current: Notes payable 5,013 56,618 59,035 Advances from customers 3,706 41,856 60,605 Other accounts payable and accrued expenses 2,866 32,373 69,930 Taxes payable 1,214 13,716 18,143 Contingent Liabilities 21,893 247,266 244,418 Total current liabilities 34,692 391,829 452,131

Long-Term: Deferred income tax 3,228 36,458 26,785 Notes payable 10,026 113,237 177,107 Reserve for labor obligations 2,929 33,076 29,144 Total liabilities 50,875 574,600 685,167

STOCKHOLDERS' EQUITY Capital stock 100,410 1,134,048 1,134,078 Retained (deficit) earnings (16,069) (181,486) (170,849) Provision for repurchase of shares 3,548 40,076 40,066 Accumulated effect of deferred income tax (8,492) (95,907) (95,907) Surplus on restatement of capital 406 4,585 4,585 Minority interest 48 537 523 Total stockholders' equity 79,851 901,853 912,496 Total liabilities and stockholders' equity 130,726 1,476,453 1,597,663

(1) Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 11.2942 per U.S. dollar, the rate on March 31, 2005.

GRUPO RADIO CENTRO, S.A. DE C.V. CONSOLIDATED UNAUDITED STATEMENTS OF INCOME for the three-month Period ended March 31, 2005 and 2004 expressed in Mexican Pesos ("Ps.") with purchasing power as of March 31, 2005 (figures in thousands of Ps. and U.S. dollars ("U.S. $")(1), except per Share and per ADS amounts)

March 31 2005 2004 U.S.$ (1) Ps. Ps. Broadcasting revenue (2) 9,420 106,391 121,620 Broadcasting expenses, excluding depreciation, amortization and corporate expenses 7,647 86,363 117,380 Broadcasting income 1,773 20,028 4,240

Depreciation and amortization 862 9,735 24,367 Corporate general and administrative expenses 379 4,284 7,641 Operating income (loss) 532 6,009 (27,768)

Comprehensive financing income (cost): Interest expense (719) (8,142) (6,636) Interest income (2) 52 583 179 Gain (loss) on foreign currency exchange, net (52) (589) 1,732 Gain (loss) on net monetary position 177 2,004 1,158 (542) (6,144) (3,567)

Other expenses, net (800) (9,033) (10,684) Loss before provisions (810) (9,168) (42,019)

Provisions for income tax & employee profit sharing 4 44 0 Net loss (814) (9,212) (42,019)

Net loss applicable to: Majority interest (814) (9,217) (42,006) Minority interest 0 5 (13) (814) (9,212) (42,019)

Net income (loss) per Series A Share (3) (0.003) (0.035) (1.912) Net income (loss) per ADS (3) (0.028) (0.317) (17.205) Weighted average common shares outstanding (000's) (3) 162,537 162,685

(1) Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 11.2942 per U.S. dollar, the rate on March 31, 2005.

(2) Broadcasting revenue for a particular period includes (as a reclassification of interest income) interest earned on funds received by the Company pursuant to advance sales of commercial air time to the extent that the underlying funds were earned by the Company during the period in question. Advances from advertisers are recognized as broadcasting revenue only when the corresponding commercial air time has been transmitted. Interest earned and treated as broadcasting revenue for the first quarter of 2005 and 2004 was Ps. 106,000 and Ps. 574,000, respectively.

(3) Earnings per share calculations are made for the last twelve months as of the date of the income statement, as required by the Mexican Stock Exchange.

Source: Grupo Radio Centro, S.A. de C.V.

CONTACT: In Mexico, Pedro Beltran or Alfredo Azpeitia, both of Grupo Radio Centro, S.A. de C.V., +5255-5728-4800 Ext. 7018, or aazpeitia@grc.com.mx; or In NY, Maria Barona or Peter Majeski, both of i-advize Corporate Communications, Inc., +1-212-406-3690, or grc@i-advize.com.mx, both for Grupo Radio Centro, S.A. de C.V.

Web site: http://www.radiocentro.com.mx/

------- Profile: Ent