Grupo Radio Centro Reports Second Quarter and First Half 2011 Results

MEXICO CITY, July 20, 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 second quarter and first half ended June 30, 2011. 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 2011 totaled Ps. 230,431,000, a 10.5% increase compared to the Ps. 208,589,000 reported for the second quarter of 2010. This increase was mainly attributable to higher advertising expenditures by the Company’s clients in Mexico, who purchased more airtime during the second quarter of 2011 compared to the same period of 2010.    

The Company’s broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the second quarter of 2011 totaled Ps. 167,542,000, a slight increase compared to the Ps. 167,245,000 reported for the second quarter of 2010.  

The Company’s broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the second quarter of 2011 totaled Ps. 62,889,000, a 52.1% increase compared to the Ps. 41,344,000 reported for the second quarter of 2010. This increase was attributable to the increase in broadcasting revenue described above.

The Company’s depreciation and amortization expenses in the second quarter of 2011 totaled Ps. 5,577,000, a 9.2% decrease compared to the Ps. 6,145,000 reported for the second quarter of 2010.  This decrease was attributable to a reduction in the amount of depreciable assets during the second quarter of 2011 as compared to the same period of 2010.

The Company’s corporate, general and administrative expenses in the second quarter of 2011 totaled Ps. 3,779,000, the same amount reported for the second quarter of 2010.

The Company’s operating income for the second quarter of 2011 totaled Ps. 53,533,000, a 70.4% increase compared to the Ps. 31,420,000 reported for the second quarter of 2010.  This increase was mainly due to the increase in broadcasting income described above.

The Company’s other expenses, net, for the second quarter of 2011 totaled Ps. 16,183,000, a 24.4% increase compared to the Ps. 13,010,000 reported for the second quarter of 2010. This increase was mainly attributable to non-recurring expenses and legal expenses during the second quarter of 2011.

The Company’s comprehensive financing cost in the second quarter of 2011 totaled Ps. 5,624,000, a slight increase compared to the Ps. 5,480,000 reported for the second quarter of 2010.

The Company’s income before income taxes in the second quarter of 2011 totaled Ps. 31,726,000, a 145.4% increase compared to the Ps. 12,930,000 reported for the second quarter of 2010.  

The Company’s income taxes totaled Ps. 15,339,000 in the second quarter of 2011, a 56.4% increase compared to the Ps. 9,809,000 reported for the second quarter of 2010.  This increase was due to an increase in taxable income during the second quarter of 2011 as compared to the same period of 2010.

As a result of the foregoing, the Company’s net income in the second quarter of 2011 totaled Ps. 16,387,000, more than five times the Ps. 3,121,000 of net income reported for the second quarter of 2010.

First Half Results

The Company’s broadcasting revenue for the six months ended June 30, 2011 totaled Ps. 419,197,000, an 11.8% increase compared to the Ps. 374,870,000 reported for the same period of 2010. This increase was mainly attributable to an increase in advertising expenditures by the Company’s clients, who purchased more airtime during the first half of 2011 than in the same period of 2010.

The Company’s broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2011 totaled Ps. 338,198,000, a 3.1% increase compared to the Ps. 328,028,000 reported for the same period of 2010. This increase was primarily due to (i) higher research and promotion costs, (ii) increased production costs of talk shows, and (iii) higher commissions paid to the Company’s sales force and to advertising agencies due to higher broadcasting revenue, in each case, in the first half of 2011 compared to the same period of 2010.

The Company’s broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2011 totaled Ps. 80,999,000, a 72.9% increase compared to the Ps. 46,842,000 reported for the same period of 2010.

The Company’s depreciation and amortization expenses for the first six months of 2011 totaled Ps. 11,188,000, a 9.0% decrease compared to the Ps. 12,289,000 reported for the same period of 2010. This decrease was due to a reduction in the amount of depreciable assets in the first half of 2011 compared to the same period of 2010.

The Company’s corporate, general and administrative expenses for the first six months of 2011 totaled Ps. 7,557,000, the same amount reported for the same period of 2010.

As a result of the foregoing, the Company recorded operating income of Ps. 62,254,000 for the first six months of 2011, a 130.6% increase compared to the Ps. 26,996,000 reported for the same period of 2010.

The Company’s other expenses, net, for the first six months of 2011 totaled Ps. 31,203,000, a 17.9% increase compared to the Ps. 26,465,000 reported for the same period of 2010. This increase was mainly attributable to non-recurring expenses and legal expenses in the first half of 2011 compared to the same period of 2010.

The Company’s comprehensive cost of financing for the first six months of 2011 totaled Ps. 10,384,000, a decrease of 19.1% compared to the Ps. 12,840,000 reported for the same period of 2010. This decrease was mainly attributable to a reduction in the interest expense paid in the first half of 2011 resulting from a reduction in the annual interest rate of the Company’s loan with Banco Inbursa, S.A. from 13% through March 18, 2010 to 9.5% thereafter combined with a reduction in the principal amount of such loan.

The Company’s income before income taxes for the first six months of 2011 totaled Ps. 20,667,000, a significant increase compared to the loss before taxes of Ps. 12,309,000 reported for the same period of 2010.  This increase was mainly due to the aforementioned increase in broadcasting revenue.

The Company’s income taxes for the first six months of 2011 totaled Ps. 21,576,000, a 77.3% increase compared to the Ps. 12,167,000 recorded for the same period of 2010.  This increase was mainly due to an increase in taxable income in the first half of 2011 compared to the same period of 2010.

As a result of the foregoing, the Company recorded a net loss of Ps. 909,000 in the first six months of 2011, compared to a net loss of Ps. 24,476,000 for the same period of 2010.

Recent Events

As of January 1, 2011, the Company adopted the IFRS applicable to its financial information.  Financial results included in this press release from both the first half of 2011 and the first half of 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.