Grupo Radio Centro Reports Second Quarter and First Half 2012 Results

Jul 17, 2012, 19:53 ET from Grupo Radio Centro, S.A.B. de C.V.

MEXICO CITY, July 17, 2012 /PRNewswire/ -- Grupo Radio Centro, S.A.B. de C.V. (NYSE: RC, BMV: RCENTRO-A) (the "Company"), one of Mexico's leading radio broadcasting companies, announced today its results of operations for the second quarter and first half ended June 30, 2012. All figures were prepared in accordance with International Financial Reporting Standards (IFRS).

Second Quarter Results

The Company's broadcasting revenue for the second quarter of 2012 totaled Ps. 235,834,000, a 2.3% increase compared to the Ps. 230,431,000 reported for the second quarter of 2011. This slight increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico, who purchased more airtime during the second quarter of 2012 compared to the same period of 2011.    

The Company's broadcasting expenses (excluding depreciation, amortization and corporate expenses) for the second quarter of 2012 totaled Ps. 177,973,000, a 6.2% increase compared to the Ps. 167,542,000 reported for the second quarter of 2011.  This increase was mainly due to (i) higher commissions paid to the Company's sales force and to advertising agencies due to the increase in broadcasting revenue and (ii) higher expenses related to the radio station in Los Angeles, KXOS-FM.

The Company's depreciation and amortization expenses for the second quarter of 2012 totaled Ps. 5,183,000, a 7.1% decrease compared to the Ps. 5,577,000 reported for the second quarter of 2011.  This decrease was attributable to a reduction in the amount of depreciable assets.

The Company's corporate expenses for the second quarter of 2012 totaled Ps. 3,779,000, the same amount reported for the second quarter of 2011.

The Company's operating income for the second quarter of 2012 totaled Ps. 48,899,000, an 8.7% decrease compared to the Ps. 53,533,000 reported for the second quarter of 2011.  This decrease was mainly due to the increase in broadcasting expenses described above.

The Company's other expenses, net for the second quarter of 2012 totaled Ps. 29,336,000, an 81.3% increase compared to the Ps. 16,183,000 reported for the second quarter of 2011. This increase was mainly attributable to legal expenses incurred during the second quarter of 2012.

The Company's finance costs for the second quarter of 2012 totaled Ps. 3,270,000, a 41.9% decrease compared to the Ps. 5,624,000 reported for the second quarter of 2011. This decrease was mainly attributable to a reduction in the interest expense paid under the Company's loan with Banco Inbursa, S.A. as a result of the payment by the Company of a portion of the principal thereon.

The Company's profit before income taxes for the second quarter of 2012 totaled Ps. 16,293,000, a 48.6% decrease compared to the Ps. 31,726,000 reported for the same period of 2011.  

The Company's income tax totaled Ps. 6,768,000 as a negative provision for the second quarter of 2012, a significant decrease compared to the Ps. 15,339,000 recorded in the second quarter of 2011.  This decrease was mainly due to certain tax benefits obtained.

As a result of the foregoing, the Company's profit in the second quarter of 2012 totaled Ps. 23,061,000, a 40.7% increase compared to the profit of Ps. 16,387,000 recorded for the second quarter of 2011.

First Half Results

The Company's broadcasting revenue for the six months ended June 30, 2012 totaled Ps. 477,546,000, a 13.9% increase compared to the Ps. 419,197,000 reported for the same period of 2011. This increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico, who purchased more airtime during the first half of 2012 compared to the same period of 2011.

The Company's broadcasting expenses (excluding depreciation, amortization and corporate expenses) for the first six months of 2012 totaled Ps. 358,818,000, a 6.1% increase compared to the Ps. 338,198,000 reported for the same period of 2011. This increase was primarily due to (i) higher commissions paid to the Company's sales force and to advertising agencies due to the increase in broadcasting revenue, (ii) higher expenses related to the Los Angeles radio station, KXOS-FM and (iii) an increase in production costs for talk shows programs.  

The Company's depreciation and amortization expenses for the first six months of 2012 totaled Ps. 10,451,000, a 6.6% decrease compared to the Ps. 11,188,000 reported for the same period of 2011. This decrease was due to a reduction in the amount of depreciable assets in the first half of 2012 compared to the same period of 2011.

The Company's corporate expenses for the first six months of 2012 totaled Ps. 7,557,000, the same amount reported for the same period of 2011.

The Company's operating income for the first six months of 2012 totaled Ps. 100,720,000, a 61.8% increase compared to the Ps. 62,254,000 reported for the same period of 2011.

The Company's other expenses, net for the first six months of 2012 totaled Ps. 43,705,000, a 40.1% increase compared to the Ps. 31,203,000 reported for the same period of 2011. This increase was mainly attributable to legal expenses in the first half of 2012 compared to the same period of 2011.

The Company's finance costs for the first six months of 2012 totaled Ps. 7,173,000, a decrease of 30.9% compared to the Ps. 10,384,000 reported for the same period of 2011. This decrease was mainly attributable to a reduction in the interest expense paid under the Company's loan with Banco Inbursa, S.A. as a result of the payment by the Company of a portion of the principal thereon.

The Company's profit before income tax for the first six months of 2012 totaled Ps. 49,842,000, a 141.2% increase compared to the profit before income tax of Ps. 20,667,000 reported for the same period of 2011.  This increase was mainly due to the aforementioned increase in broadcasting revenue.

For the first six months of 2012, the Company's income tax totaled Ps. 2,518,000 as a negative provision, a significant decrease compared to the income tax of Ps. 21,576,000 recorded for the same period of 2011.  This decrease was mainly the result of certain tax benefits obtained.

As a result of the foregoing, the Company's profit in the first six months of 2012 totaled Ps. 52,360,000, compared to a net loss of Ps. 909,000 for the same period of 2011.

Company Description

Grupo Radio Centro owns and/or operates 15 radio stations. Of these 15 radio stations, 12 are located in Mexico City, two AM stations in Guadalajara and Monterrey, and one FM station in Los Angeles. The Company's principal activities are the production and broadcasting of musical and entertainment programs, talk shows, news and special events programs.  Revenue is primarily derived from the sale of commercial airtime. In addition to the Organizacion Radio Centro radio stations, the Company also operates Grupo RED radio stations and Organizacion Impulsora de Radio (OIR), a radio network that acts as the national sales representative for, and provides programming to 127 Grupo Radio Centro-affiliated radio stations throughout Mexico.

Note on Forward Looking Statements

This release may contain projections or other forward-looking statements related to Grupo Radio Centro that involve risks and uncertainties. Readers are cautioned that these statements are only predictions and may differ materially from actual future results or events. Readers are referred to the documents filed by Grupo Radio Centro with the United States Securities and Exchange Commission, specifically the most recent filing on Form 20-F, which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements are based on information available to Grupo Radio Centro on the date hereof, and Grupo Radio Centro assumes no obligation to update such statements.

IR Contacts

In Mexico:

In NY:

Pedro Beltran / Alfredo Azpeitia

Maria Barona / Peter Majeski

Grupo Radio Centro, S.A.B. de C.V.

i-advize Corporate Communications, Inc.

Tel: (5255) 5728-4800 Ext. 4910

Tel: (212) 406-3690

aazpeitia@grc.com.mx

grc@i-advize.com.mx

GRUPO RADIO CENTRO, S.A.B. DE C.V.

CONSOLIDATED UNAUDITED BALANCE SHEETS

as of June 30, 2012 and 2011

(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars ("U.S. $") (1)

June 30,

2012

2011

U.S. $(1)

Ps.

Ps.

ASSETS

Current assets:

 Cash and cash equivalents

5,447

74,373

124,397

Accounts receivable:

 Broadcasting receivables - Net

19,975

272,714

302,733

 Other receivables

980

13,382

7,504

20,955

286,096

310,237

Prepaid expenses

4,039

55,150

28,209

Deferred taxes

288

3,934

0

 Total current assets

30,729

419,553

462,843

Property and equipment

35,579

485,761

431,246

Deferred charges, net

200

2,725

4,330

Goodwill

60,709

828,863

828,863

Other assets

268

3,653

3,416

Total assets

127,485

1,740,555

1,730,698

LIABILITIES

Current liabilities:

 Current portion of long-term debt

2,970

40,554

40,871

 Deferred revenue

2,106

28,757

122,562

 Accounts payable and accrued expenses

4,753

64,895

68,164

 Taxes payable

2,698

36,838

59,149

    Total current liabilities

12,527

171,044

290,746

Non-current liabilities:

 Long-term debt

2,197

30,000

70,000

 Employee benefits

5,748

78,472

61,136

 Deferred taxes

0

0

20,258

Total liabilities

20,472

279,516

442,140

STOCKHOLDERS' EQUITY

Common stock

77,636

1,059,962

1,059,962

Retained earnings

26,828

366,285

196,185

Reserve for repurchase of shares

2,197

29,989

29,989

Other comprehensive income

336

4,590

2,105

Equity attributable to owners of the Company

106,997

1,460,826

1,288,241

Non-controlling Interest

16

213

317

    Total equity

107,013

1,461,039

1,288,558

Total liabilities and Stockholders' equity

127,485

1,740,555

1,730,698

(1)  Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps.13.653 per U.S. dollar, the rate on June 30, 2012

GRUPO RADIO CENTRO, S.A.B. DE C.V.

CONSOLIDATED UNAUDITED STATEMENTS OF INCOME

for the three-month and six-month periods ended June 30, 2012 and 2011

(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars ("U.S. $")(1), except per Share and per ADS amounts)

2nd Quarter

Accumulated 6 months

2012

2011

2012

2011

U.S.$ (1)

Ps.

Ps.

U.S.$ (1)

Ps.

Ps.

Broadcasting revenue (2)

17,273

235,834

230,431

34,977

477,546

419,197

Broadcasting expenses, excluding depreciation,

amortization and corporate expenses

13,035

177,973

167,542

26,281

358,818

338,198

Depreciation and amortization

380

5,183

5,577

765

10,451

11,188

Corporate expenses

277

3,779

3,779

554

7,557

7,557

Operating income

3,581

48,899

53,533

7,377

100,720

62,254

Other expenses, net

(2,149)

(29,336)

(16,183)

(3,201)

(43,705)

(31,203)

Finance costs:

 Interest expense

(246)

(3,357)

(5,680)

(511)

(6,977)

(10,371)

 Interest income (2)

7

92

41

9

125

2

 Income (loss) on foreign currency exchange, net

0

(5)

15

(24)

(321)

(15)

 Net finance costs

(239)

(3,270)

(5,624)

(526)

(7,173)

(10,384)

Profit before income taxes

1,193

16,293

31,726

3,650

49,842

20,667

 Income tax expense

(496)

(6,768)

15,339

(184)

(2,518)

21,576

 Profit (loss) for the period

1,689

23,061

16,387

3,834

52,360

(909)

Profit (loss) applicable to:

 Majority interest

1,689

23,064

16,386

3,834

52,360

(912)

 Minority interest

0

(3)

1

0

0

3

1,689

23,061

16,387

3,834

52,360

(909)

Net income (loss) per Series A Share (3)

0.103

1.4058

0.5160

Net income (loss) per ADS (3)

0.927

12.6522

4.6440

Weighted average common shares outstanding (000's) (3)

162,725

162,725

(1)  Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 13.653 per U.S. dollar, the rate on June 30, 2012

(2)  Broadcasting revenue for a particular period includes (as a reclassification of interest income) interest earned on funds received by the Company pursuant to advance sales of commercial air time to the extent that the underlying funds were earned by the Company during the period in question. Advances from advertisers are recognized as broadcasting revenue only when the corresponding commercial air time has been transmitted. Interest earned and treated as broadcasting revenue for the second quarter of 2012 and 2011 was Ps. 1,224,000 and Ps. 562,000, respectively. Interest earned and treated as broadcasting revenue for the six months ended June 30, 2012 and 2011 was Ps. 2,338,000 and Ps. 1,023,000, respectively

(3) Earnings per share calculations are made for the last twelve months as of the date of the income statement, as required by the Mexican Stock Exchange.

SOURCE Grupo Radio Centro, S.A.B. de C.V.