CME Q2 Revenue Up Thanks to Bulgarian Acquisition

Central European Media Enterprises Ltd., which bought Bulgaria's first national private television bTV earlier this year, said its revenues rose 10.3% to USD 201.7 M in the second quarter as the Bulgarian acquisition offset a slump in ad income.

“The decisive actions we took in the last four quarters to reposition our business, including the sale of our Ukrainian operations, the acquisition of bTV in Bulgaria and integration of Media Pro Entertainment, have paid off,” CME Chief Executive Officer Adrian Sarbu said in the statement.

Net income during the quarter was helped by a gain of USD 217.6 M from the sale of the Ukrainian operations. Revenue rose to USD 201.7 M from USD 182.9 M. Operating income before depreciation and amortization rose 1% to USD 46.19 M.

“The first half of the year was difficult, with only the Czech Republic and Slovenia starting to recover,” Sarbu said. “The second half will be challenging, but our continuing audience leadership uniquely positions us to take advantage of any improvements in our markets.”

News Corporation completed the sale of the largest Bulgarian private TV station, bTV, to Central European Media Enterprises in late April.

Rupert Murdoch’s News Corporation sold bTV for a total of USD 400 M plus a payment of USD 13 M for a working capital adjustment to Central European Media Enterprises owned by another tycoon, Ronald Lauder.

Regulatory clearance from the Bulgarian Competition Protection Agency was received on April 8, 2010.

Under the terms of the agreement, CME will acquire 100% of the terrestrial free-to-air TV channel, bTV. It will also take control of the two genre channels, bTV Comedy and bTV Cinema, along with News Corporation’s 74% interest in Radio Company C.J which operates five radio stations.

The approval of Bulgaria's watchdog came just as CME wrapped up the sale of Ukrainian channels Studio 1+1 and Kino to local businessman Igor Kolomoisky for USD 300 M and said it would use the proceeds to close its Bulgarian buy.

News Corporation was advised by JP Morgan, while CME was advised by Deutsche Bank AG, London Branch.

The sale is the third large deal on the Bulgarian TV market for the last two years after the US Central European Media Enterprises bought the cable TV2 and Ring for EUR 110 M, and the Swedish MTG Group acquired Nova TV for EUR 620 M.