Grupo Radio Centro Reports Second Quarter and First Half 2012 Results

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.

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