CTC Media Reports Decline in Net Profits in 2011

The audience share of its channels also went down.

MOSCOW -- CTC Media, Russia’s leading independent media company, has announced its unaudited consolidated financial results for 2011’s fourth quarter and the full year 2011, which suggest that the company’s profits dwindled during the period in question, while so did the audience share.

Although in last year’s final quarter, the company’s total operating revenues were up six per cent to $236.8 million, the net income declined by 133 percent to $24.5 million. In the entire year 2011, CTC Media’s net revenues increased by 27 percent to $766.4 million, but the net income was down by 64 percent, year-on-year.

CTC Media, which operates the Russian television channels CTC, Domashny and Perets, as well as TV assets in Kazakhstan and Moldova, primarily attributed the decline in the net income to increased operating costs and a slowdown in the Russian TV advertising market.

“The growth of the TV advertising market did slow down during the second half of the year, which partly reflected the high comps in 2010, while our revenue growth levels were impacted by lower year-on-year audience shares for our flagship CTC channel,” Boris Podolsky, acting chief executive officer and chief financial officer, commented in a statement. “The year-on-year growth in our operating costs reflected the investments that we have made in programming, regional stations, and our new media projects, and our absolute profitability was also impacted by a number of non-cash impairment charges.”

Meanwhile, the audience share of CTC Media’s channels also declined in 2011. The share of the flagship channel, CTC, was down from 11.9 percent to 10.7 percent and that of Perets, formerly DTV, from 2.1 percent to 2 percent. The share of Domashny remained at 3.1 percent.

From Aug. 1, 2011 to Feb. 28, 2012, the stock price of CTC Media on NASDAQ declined from $21.43 per share to $10.5 per share.

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