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Monday, July 21, 2008

Grupo Radio Centro Reports Second Quarter and First Half 2008 Results

Grupo Radio Centro Reports Second Quarter and First Half 2008 Results

MEXICO CITY, July 21 /PRNewswire-FirstCall/ -- Grupo Radio Centro, S.A.B. 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 second quarter and first half ended June 30, 2008. All figures were prepared in accordance with the Financial Reporting Standards issued by the Mexican Board for Research and Development of Financial Information Standards.

Second Quarter Results

Broadcasting revenue for the second quarter 2008 was Ps. 173,613,000, representing an increase of 16.1% compared to the Ps. 149,589,000 reported in the second quarter 2007. This increase was mainly attributable to higher advertising expenditures from the Company's clients, who purchased more airtime during the second quarter 2008 compared to the same period 2007. This was a result of a highly competitive environment, mainly in the retail sector, the Company's efforts to gain market share with competitive sales plans and the strengthening of the Company's sales force staff.

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the second quarter 2008 were Ps. 108,856,000, representing an increase of 5.0% compared to the Ps. 103,641,000 reported in the second quarter 2007. This increase was primarily due to higher sales commissions to the Company's general sales force as a result of the increase in broadcasting revenue, as well as higher expenses related to the Company's promotional activities, market research, and advertising during the second quarter 2008 compared to the same period 2007.

For the second quarter 2008, the Company reported broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) of Ps. 64,757,000, a 40.9% increase compared to the Ps. 45,948,000 reported in the second quarter 2007. This increase in broadcasting income was mainly attributable to the aforementioned increase in broadcasting revenue.

Depreciation and amortization expenses for the second quarter 2008 were Ps. 8,051,000, a 9.0% decrease compared to the Ps. 8,851,000 reported in the second quarter 2007. Depreciation and amortization expenses were lower in the second quarter 2008 due to the Company no longer recording depreciation on certain assets whose useful lives have ended.

The Company's corporate, general and administrative expenses were Ps. 3,805,000 in the second quarter 2008, compared to the Ps. 3,834,000 reported in the second quarter 2007.

The Company reported operating income of Ps. 52,901,000 in the second quarter 2008, a 59.0% increase compared to the Ps. 33,263,000 in operating income reported in the second quarter 2007. This increase was due to increased broadcasting revenue during the second quarter 2008 compared to the second quarter 2007, as described above.

During the second quarter 2008, other expenses, net, were Ps. 12,622,000, a 32.6% increase compared to the Ps. 9,521,000 reported in the second quarter 2007. This increase was mainly attributable to higher legal expenses during the second quarter 2008 compared to the comparable period of 2007.

The Company's comprehensive financing cost for the second quarter 2008 was Ps. 4,370,000, an increase of 69.6% compared to the Ps. 2,576,000 reported in the second quarter 2007. This unfavorable change was mainly due to fees paid in the second quarter 2008 in connection with amendments to the Company's credit facility with GE Capital CEF Mexico, S. de R.L. de C.V. and Banco Inbursa S.A., which was set to expire in June, 2008 and was renewed for an additional two years.

For the second quarter 2008, the Company reported income before taxes of Ps. 35,909,000, an increase of 69.7% compared to the Ps. 21,166,000 reported in the second quarter 2007, primarily from the increase in broadcasting income during the second quarter 2008, as described above.

The Company recorded income taxes of Ps. 10,469,000 in the second quarter 2008, an increase of 104.6% compared to the Ps. 5,117,000 recorded in the second quarter 2007. This increase was due to higher taxable income in the second quarter 2008 compared to the comparable period.

As a result of the foregoing, the Company's net income for the second quarter 2008 reached Ps. 25,440,000, an increase of 58.5% compared to net income of Ps. 16,049,000 reported in the second quarter 2007.

First Half Results

For the six months ended June 30, 2008, broadcasting revenue was Ps. 301,871,000, representing an 8.5% increase compared to the Ps. 278,123,000 reported in the same period 2007. The increase in broadcasting revenue was mainly attributable to an increase in advertising expenditures by the Company's clients, who purchased more airtime during the first half 2008 than the comparable period. This was the result of a highly competitive environment, mainly in the retail sector, as well as the Company's efforts to gain market share with competitive sales plans and the strengthening of the Company's sales force staff.

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2008 were Ps. 212,837,000, a slight decrease compared to the Ps. 213,610,000 reported in the same period 2007.

Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2008 was Ps. 89,034,000, an increase of 38.0% compared to the Ps. 64,513,000 reported in the same period 2007. This increase was mainly attributable to the increase in broadcasting revenue, as described above.

Depreciation and amortization expenses for the first six months of 2008 were Ps. 15,732,000, a decrease of 11.5% compared to the Ps. 17,780,000 reported in the same period 2007. This decrease was due to the Company no longer recording depreciation on certain of the Company assets whose useful lives have ended.

The Company's corporate, general and administrative expenses for the first six months of 2008 were Ps. 7,300,000, a slight increase compared to the Ps. 7,273,000 reported in the same period 2007.

As a result of the foregoing, the Company reported operating income of Ps. 66,002,000 for the first six months of 2008, a 67.3% increase compared to the Ps. 39,460,000 reported in the same period 2007.

Other expenses, net, for the first six months of 2008 were Ps. 24,445,000, a 19.3% increase compared to the Ps. 20,498,000 reported in the same period 2007. This increase was mainly attributable to higher legal expenses during the second quarter 2008, as well as other expenses related to the Company's listings on the Bolsa Mexicana de Valores (the Mexican stock exchange) and The New York Stock Exchange compared to the same period 2007.

The Company's comprehensive cost of financing for the first six months of 2008 was Ps. 4,507,000, a 118.2% increase compared to the Ps. 2,066,000 reported in the same period 2007. This unfavorable change was mainly due to fees paid in the second quarter 2008 in connection with the amendment of the Company's credit facility, as described above.

For the first six months of 2008, the Company reported income before taxes of Ps. 37,050,000, a 119.3% increase compared to the Ps. 16,896,000 reported in the same period 2007, mainly due to the previously mentioned increase in broadcasting revenue.

The Company recorded income taxes of Ps. 10,800,000 for the first six months of 2008, compared to the Ps. 3,815,000 recorded in the same period 2007, primarily due to higher taxable income.

As a result of the foregoing, the Company reported net income of Ps. 26,250,000 in the first half of 2008, more than double the Ps. 13,081,000 reported in the first six months of 2007.

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.B. DE C.V.                   CONSOLIDATED UNAUDITED BALANCE SHEETS                      as of June 30, 2008 and 2007 (1)             (figures in thousands of Mexican pesos ("Ps.") and                        U.S. dollars ("U.S. $") (2)                                                        June 30,                                                  2008            2007                                        U.S. $(2)      Ps.         Ps.            ASSETS   Current assets:     Cash and temporary investments       10,148    104,366      48,261    Accounts receivable:     Broadcasting, net                    15,731    161,774     189,877     Other                                   550      5,658       5,753     Income taxes recoverable                  0          0       6,488                                          16,281    167,432     202,118    Prepaid expenses                        2,548     26,206      23,148     Total current assets                 28,977    298,004     273,527    Property and equipment, net            45,475    467,669     473,077   Deferred charges, net                     507      5,216       4,005   Excess of cost over book value of    net assets of subsidiaries, net       80,597    828,863     828,862   Other assets                              323      3,325       3,381         Total assets                    155,879  1,603,077   1,582,852          LIABILITIES   Current:     Advances from customers              10,814    111,219     102,977     Suppliers and other accounts      payable                              7,004     72,030      63,823     Taxes payable                         2,363     24,299      24,483        Total current         liabilities                      20,181    207,548     191,283    Long-Term:     Reserve for labor liabilities         5,846     60,116      55,144     Deferred taxes                          217      2,233       5,278         Total liabilities                26,244    269,897     251,705      SHAREHOLDERS' EQUITY   Capital stock                         109,918  1,130,409   1,130,409   Cumulative earnings                    15,387    158,240     156,220   Reserve for repurchase of    shares                                 4,263     43,839      43,839   Minority interest                          67        692         679        Total shareholders'         equity                          129,635  1,333,180   1,331,147    Total liabilities and     Shareholders' equity                155,879  1,603,077   1,582,852    (1) Amounts for the second quarter 2007 are expressed in Mexican pesos       with purchasing power as of December 31, 2007.        As a result of a change in MFRS for periods beginning in 2008, we have       not prepared 2008 amounts using inflation accounting or re-expressed       2007 amounts as of June  30, 2008.    (2)  Peso amounts have been translated into U.S. dollars, solely for the       convenience of the reader, at the rate of Ps. 10.2841 per U.S. dollar,       the rate on June 30, 2008.                        GRUPO RADIO CENTRO, S.A.B. DE C.V.                CONSOLIDATED UNAUDITED STATEMENTS OF INCOME              for the three-month and six-month periods ended                         June 30, 2008 and 2007 (1)      (figures in thousands of  Mexican pesos ("Ps.") and U.S. dollars            ("U.S.$")(2), except per Share and per ADS amounts)                                   2nd Quarter          Accumulated 6 months                                2008         2007         2008         2007                         U.S.$(2)    Ps.      Ps.  U.S.$(1)    Ps.      Ps.    Broadcasting revenue    (3)                   16,882  173,613  149,589  29,353  301,871  278,123   Broadcasting expenses,    excluding    depreciation,    amortization and    corporate, general    and administrative    expenses              10,585  108,856  103,641  20,696  212,837  213,610   Broadcasting income     6,297   64,757   45,948   8,657   89,034   64,513    Depreciation and    amortization             783    8,051    8,851   1,530   15,732   17,780   Corporate, general and    administrative    expenses                 370    3,805    3,834     710    7,300    7,273   Operating income        5,144   52,901   33,263   6,417   66,002   39,460    Other expenses, net    (1,227) (12,622)  (9,521) (2,377) (24,445) (20,498)    Comprehensive    financing cost:     Interest expense       (374)  (3,844)    (871)   (459)  (4,718)  (1,399)     Interest income (3)     (44)    (452)  (1,673)     31      315      128     (Loss) Gain on      foreign currency      exchange, net           (7)     (74)     (32)    (10)    (104)       1     (Loss) Gain on net      monetary position(4)     0        0        0       0        0     (796)                            (425)  (4,370)  (2,576)   (438)  (4,507)  (2,066)    Income before income    taxes                  3,492   35,909   21,166   3,602   37,050   16,896      Income taxes          1,018   10,469    5,117   1,050   10,800    3,815   Net income              2,474   25,440   16,049   2,552   26,250   13,081    Net income applicable    to:     Majority interest     2,473   25,434   16,045   2,551   26,235   13,072     Minority interest         1        6        4       1       15        9                           2,474   25,440   16,049   2,552   26,250   13,081    Net income  per Series    A Share (5)                                      0.062   0.6407   0.5001   Net income  per ADS (5)                           0.561   5.7663   4.5009   Weighted average    common shares    outstanding (000's) (5)                                 162,725  162,592    (1)  Amounts for the second quarter 2007 are expressed in Mexican pesos        with purchasing power as of December 31, 2007.        As a result of a change in MFRS for periods beginning in 2008, we        have not prepared 2008 amounts using inflation accounting        or re-expressed 2007 amounts as of June 30, 2008.    (2)  Peso amounts have been translated into U.S. dollars, solely for the        convenience of the reader, at the rate of Ps. 10.2841 per U.S.        dollar, the rate on June 30, 2008.    (3)  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 second quarter of 2008 and 2007 was        Ps. 1,393,000 and Ps. 537,000, respectively. Interest earned and        treated as broadcasting revenue for the six months ended June 30,        2008 and 2007 was Ps. 2,361,000 and Ps. 934,000, respectively.    (4)  As a result of a change in MFRS for periods beginning in 2008, we        will no longer use inflation accounting unless the economic        environment is "inflationary", as defined by MFRS. Since the economic        environment was not inflationary in the second quarter 2008, we have        not reported gain (loss)  on net monetary position for this period.    (5)  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.  

First Call Analyst:
FCMN Contact: pmajeski@i-advize.com

Source: Grupo Radio Centro

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

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


Profile: International Entertainment

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