Grupo Radio Centro Reports First Quarter 2011 Results

MEXICO CITY, April 15, 2011 /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 quarter ended March 31, 2011. All figures were prepared in accordance with the International Financial Reporting Standards (IFRS).

First Quarter Results

Broadcasting revenue in the first quarter of 2011 was Ps. 188,766,000, 13.5% higher than Ps. 166,281,000 in the first quarter of 2010. This increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico during the first quarter 2011 compared to the same period 2010.    

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) in the first quarter of 2011 totaled Ps. 170,656,000, a 6.1% increase compared to Ps. 160,783,000 in the first quarter of 2010.  This increase was primarily due to (i) higher commissions paid to the Company's sales force and to advertising agencies due to higher broadcasting revenue in the first quarter 2011 compared to the same period in 2010, (ii) higher costs and expenses related to sales, and (iii) increased production costs of talk shows.

The Company's broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) in the first quarter of 2011 was Ps. 18,110,000, a 229.4% increase compared to Ps. 5,498,000 in the first quarter of 2010.  This increase was attributable to the increase in broadcasting revenue described above.

Depreciation and amortization expenses in the first quarter of 2011 were Ps. 5,611,000, an 8.7% decrease compared to Ps. 6,144,000 in the first quarter of 2010.  This decrease was attributable to a reduction in the amount of depreciable assets.

The Company's corporate, general and administrative expenses in the first quarter of 2011 totaled Ps. 3,778,000, compared to Ps. 3,778,000 in the first quarter 2010.

For the first quarter of 2011 the Company reported an operating income of Ps. 8,721,000, compared to an operating loss of Ps. 4,424,000 in the first quarter of 2010, mainly due to the increase in broadcasting income described above.

For the first quarter of 2011, other expenses, net, were of Ps. 15,020,000, an 11.6% increase compared to Ps. 13,455,000 in the first quarter 2010. This increase was mainly attributable to expenses incurred during the first quarter of 2011 in connection with the Los Angeles radio station.

The Company's comprehensive financing cost in the first quarter of 2011 was Ps. 4,760,000 from Ps. 7,360,000 in the first quarter of 2010.  This 35.3% decrease was mainly attributable to a reduction in the interest expense paid in the first quarter of 2011 due to a reduction in the annual interest rate from 13% through March 18, 2010 to 9.5% thereafter combined with a reduction in the principal amount of the Company's loan with Inbursa.

The Company reported a loss before income taxes in the first quarter of 2011 of Ps. 11,059,000, compared to loss before income taxes of Ps. 25,239,000 reported in the first quarter of 2010.  

The Company recorded income taxes of Ps. 6,237,000 in the first quarter 2011, compared to Ps. 2,358,000 in the first quarter 2010 due to an increase in taxable income.

As a result of the foregoing, the Company's net loss in the first quarter of 2011 was Ps. 17,296,000, compared to net loss of Ps. 27,597,000 in the first quarter of 2010.

Recent Events

The Company announced that its Audit Committee and Board of Directors have resolved that its new auditors for the fiscal year beginning January 1, 2011 will be Galaz, Yamazaki, Ruiz Urquiza, S.C., a  member firm of Deloitte Touche Tohmatsu, Limited.

The Company's Board of Directors and Audit Committee have adopted in advance International Financial Reporting Standards (IFRS) applicable to financial information as of January 1, 2011. Financial results included in this press release from both first quarter 2011 and first quarter 2010 were prepared based on such standards and are fully comparable.

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 110 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.

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