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CME sees ad revenues drop as COVID-19 impact makes itself felt

Central and eastern European broadcaster Central European Media Enterprises (CME), which is set to be acquired by Czech billionaire Petr Kellner’s PPF Group, saw its TV advertising revenues plummet for the year to date, as the impact of the COVID-19 pandemic made itself felt.

TV advertising revenues decreased 21% at actual rates and 17% at constant rates, while carriage fees and subscription revenues increased 7% at actual rates and 11% at constant rates.

For the first six months of 2020, CME saw revenues fall by 15.4% to US$279.4 million, while operating income before depreciation and amortisation fell by 17.7% to US$91.7 million.

Net revenues for Q2 declined by 26.2% to US135.5 million, while OIBDA fell b 25.7% to US$54.5 million.

The group nevertheless pointed to its ability to maintain its margins, with its OIBDA margin decreasing by less than 100 basis point to 33% in Q2. Cash generated from operating activities increased by 11% to US$155 million.

CME also provided an update on its acquisition by Kellner’s group, following approval of the merger agreement by shareholders in February and regulatory approval in Romania and Slovenia.

PPF is expected to file a required notification to the EC in the course of the current quarter, and CME said it expected the acquisition to close by October 27.

In a joint statement, Michael Del Nin and Christoph Mainusch, co-CME CEOs, said, “Our businesses have demonstrated a remarkable degree of resilience since the COVID-19 pandemic began to impact operations in March. Despite the very challenging environment, we have maintained our high margins, and cash flow in the first half of 2020 has actually increased over last year. While the pandemic has had a negative impact on advertising markets across our region, much of the downturn occurred in April and May, with June results reflecting a significant improvement in spending patterns. Based on current bookings in July and August, spending appears to be returning to comparable levels seen in the same periods in 2019. Our financial position remains strong, and we will continue taking a proactive approach in responding to the uncertainty created by the pandemic.”