Telecom Italia Media: Board of Directors Approves Group Interim Financial Report at 31 March 2012

05/09/2012 - 09:00 PM

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REVENUES: 57.5 million euro; + 5.2 million euro compared to Q1 2011 (52.3 million euro)

EBITDA: -5.9 million euro; -7.8 million euro compared to Q1 2011 (1.9 million euro)

EBIT: -20.7 million euro; -8.0 million euro compared to Q1 2011 (-12.7 million euro)

NET INCOME: -15.7 million euro; -6.5 million euro compared to Q1 2011 (-9.2 million euro)

NET FINANCIAL POSITION: 206.9 million euro; +68.2 million euro compared to the end of 2011 (138.7 million euro)

The growth trend of advertising revenues of the La7 channels continues (+28.4%); La7 audience share was virtually in line with Q1 2011 (3.4%) and average daily audience share rose (+2.0%), whereas La7d audience share increased sharply (0.34%; +41.7%)

The margins decrease is mostly affected by the increasing costs due to the enhancement of the TI Media-La7 schedule

Telecom Italia Media Board of Directors started a corporate restructuring

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The Telecom Italia Media Board of Directors, chaired by Severino Salvemini, examined and approved the Group’s Interim Financial Report at 31 March 2012.

More in detail:

Consolidated Group revenues reached 57.5 million euro in Q1 2012, with an improvement of 5.2 million euro compared to the same period of 2011 (52.3 million euro).

This performance was characterised by a sharp growth of advertising revenues of the La7 channels (+12.3 million euro; +28.4%), in strong contrast with the television market, and the increase in revenues of the Network Operator TIMB (+5.5 million euro). These performances offset the drop in revenues of the MTV Group (-2.0 million euro).

EBITDA amounted to -5.9 million euro, a 7.8 million euro decrease compared to Q1 2011 (1.9 million euro). This result was affected by the costs of programming of TI Media – La7, the drop in EBITDA of MTV, as well as the lack of profitability of the Competence Center activities, which were discontinued in September 2011, partially offset by the strong increase in EBITDA of the Network Operator TIMB.

EBIT amounted to -20.7 million euro, a decrease of 8.0 million euro compared to Q1 2011 (-12.7 million euro), substantially reflecting the change in EBITDA.

Net result was -15.7 million euro, a decrease of 6.5 million euro compared to Q1 2011 (-9.2 million euro).

Capex amounted to 9.5 million euro, a decrease of 4.7 million euro compared to Q1 2011 (14.2 million euro).

Net financial position amounted to 206.9 million euro, up by 68.2 million euro compared to year-end 2011 (138.7 million euro).

This debt was mainly attributable to the industrial investment requirements and the result of the operating activities, which was affected by both significant payments to suppliers for investments made in late 2011 for the Digital Terrestrial network and payments associated with the autumn 2011 programming, which, as known, were higher than those for the other periods of the year.

Furthermore, the change has also recorded the factoring of commercial receivables carried in late 2011.

Results by Business Unit

1. TI Media – La7

TI Media – La7 revenues amounted to 36.5 million euro in Q1 2012, up by 3.1 million euro (+9.3%) compared to the same period of 2011.

Gross advertising revenues amounted to 55.6 million euro, up 28.4% compared to Q1 2011 (43.3 million euro), thanks both to higher revenues of the La7 channel and those of the La7d channel.

The increase in advertising revenues was driven by the audience share of La7, whose daily average of 3.4% was virtually in line with Q1 2011, compared to an ongoing audience decrease of other general-interest TV networks. Furthermore La7 daily average audience increased by 2.0%, going from an average of 477 thousand viewers in the first quarter of 2011 to 487 thousand in the same period of 2012.

Moreover, audience share of La7d continued to grow, reaching 0.34%, up 41.7% compared to Q1 2011 (0.24%).

EBITDA amounted to -15.4 million euro, a 12.4 million euro decrease compared to Q1 2011 (-3.0 million euro). This performance was influenced by the increase in programming costs, expanded by the launch of new programs and new faces compared to Q1 2011, and the lack of profitability of Competence Center activities, as described above.

EBIT amounted to -22.7 million euro, decreasing by 12.8 million euro compared to Q1 2011 (-9.9 million euro).

2. MTV Group

MTV revenues for Q1 2012 amounted to 11.7 million euro, down 14.6% compared to the same period of 2011 (13.7 million euro). This performance was mainly impacted by the decline in gross advertising sales, which in the first quarter of 2012 amounted to 9.3 million euro, down by 18.9% compared to the same period of 2011 (11.5 million euro).

EBITDA amounted to -1.9 million euro, a 1.3 million euro decrease compared to Q1 2011 (-0.6 million euro). The decrease in revenues was partly offset by savings on programming and other operating costs.

EBIT amounted to -2.9 million euro, a 0.9 million euro decrease compared to Q1 2011 (-2.0 million euro).

3. Network operator (TIMB)

Network Operator revenues in Q1 2012 amounted to 18.3 million euro, increasing by 5.5 million euro compared to the same period of 2011 (12.8 million euro). This positive performance was due both to the evolution of extant contracts and new channels contracted at the end of 2011, which led to the full rental of the available digital band.

EBITDA was 11.3 million euro, increasing by 5.8 million euro compared to Q1 2011 (5.5 million euro).

EBIT was 5.0 million euro, increasing by 5.7 million euro compared to Q1 2011 (-0.7 million euro).

At 31 March 2012, TIMB’s three Digital Multiplexes (excluding the fourth, which is currently operating only in Sardinia) covered 90.1%, 94.2%, and 75.0% of the Italian population, respectively.

Outlook

In light of the economic and regulatory environment in which Telecom Italia Media operates, expectations for 2012 are as follows:

  • a light increase of television advertising revenues for the La7 channels, thanks to the growth in audience share due to the enhancement of the La7 programming, with the launch of new network specific programs and faces;
  • downsized revenues from the main MTV channel due to the restructuring of the channel (shift to a more non-targeted channel) and continue to pursue the programs aimed at achieving cost efficiencies;
  • an increase in revenues and profitability of the Network Operator, as a result of the full rental of the MUX digital band, and completion of the network digitalisation, in accordance with the switch-off calendar.

Based on the foregoing, in 2012 Telecom Italia Media expects to achieve results that are at least in line with those of 2011, in comparable terms.

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As far as MTV Italia is concerned, in order to focus the efforts in those areas which are closer to the broadcaster business, a dismissal process to Viacom - part of the joint venture - of the activities related to Nickelodeon, Comedy Central and musical channels hosted by Sky platform was decided.

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The Telecom Italia Media Board of Directors has acknowledged that today the Board of Directors of Telecom Italia has resolved to begin the process for the disposal of the Media segment.

Therefore, the Board of Directors of Telecom Italia Media started a corporate restructuring through the spin off of television assets that will be transferred to a special purpose company.

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Pursuant to sub-section 2, clause 154-bis of the Unified Finance Act, the manager in charge of drafting the company’s accounting documents, Mr. Luigino Giannini, has declared that the accounting disclosures contained in this press release correspond to the data records, accounting books and accounts entries.

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The interim Group results at 31 March 2012 will be presented to the financial community tomorrow during a conference call, starting at 4.00 pm (CET). Journalists may listen in to the presentation by phone on 800 408 088 (callers from Italy) and +39 06 33 485 042 (international callers). For those who are unable to follow the live conference call, a recorded version of the presentation will be available for 2 days at the number: +39 06 334 843 (access code: 414848# for Italian; 303737# for English).

 

 

Rome, 9 May 2012