Jul
30
CTC Media: Business expends - July 30, 2008
Filed Under Bullet-moments |
Yesterday, CTC Media has published its 2Q and 1H 2008 US GAAP report. Among new features of the financial report was the consolidation of purchased assets such as DTV channel, Costafilm and Soho Media, the companies producing TV content.
CTC Media’s quarter revenue increased by +26.3%, due to the merger with the given companies, however, the growth was partially provided by natural factors. The revenue growth rate was higher than the expenses growth rate and as a result, OIBDA margin added +2.1 p.p. and reached 42.5%.
The company confirmed its plans to gain 600-650 mn USD of sales and 45-48% of OIBDA margin. Taking into account the purchased companies, CTC Media expects sales at 650-700 mn USD and OIBDA margin at 42-46%. We have corrected our model, including the results demonstrated by purchased assets. As a result, our estimation hits the lowest level of company’s forecasts, forming 650 mn USD.
Taking into account the given changes, we have estimated a new price of CTC Media, which formed 32.6 USD per share (the previous value was 32.9 USD. The main reason of fall was decrease of negative net debt, due to purchase of new assets. According to company’s data, the price of purchased companies in 1H 2008 formed 313 mn USD, excluding the cash assets. In spite of the fall, CTC Media is still an interesting target for investors with potential growth, forming 53%. We confirm “BUY” recommendation at company’s securities.
CTC Media: Business expends - July 30, 2008 (PDF)