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Press releases | Archive 2011

RBC posts Q2 financial results: online advertising revenue surges 75%

Key financial and operating results in Q2 2011:

  • RBC’s aggregate revenue climbs 36% to RUB 1,106m;
  • Internet advertising revenue goes up 75% to RUB 557m;
  • RBC maintains high audience ratings in all segments;
  • RBC’s Internet audience rises 24% year-on-year to 48.2m1 users as of the end of June;
  • RBC concentrates its efforts on the development of mobile applications;
  • The construction of a new studio complex for RBC TV and the revamp of its broadcasting schedule are underway, along with the efforts to increase the channel’s presence in the Internet.

Moscow, September 8, 2011 — RBC OJSC (RTS, MICEX: RBCM) announces today its unaudited consolidated financial results for the second quarter of 2011.

“RBC’s consolidated revenue growth in the second quarter is primarily attributable to strong demand for the placement of advertising on the company’s Internet resources. As a result, RBC’s Internet advertising revenue surged 75%. Moreover, thanks to effective monetization methods, advertising sales on Qip.ru entertainment portal quadrupled in the period under review,” RBC OJSC CEO German Kaplun said.

“In line with expectations, the company became EBITDA-positive, as RBC’s revenue was growing faster than its expenses. RBC also retained high ratings across all three segments of the Russian advertising market. This should be reflected in the company’s financial results for the second half of 2011, which is traditionally the most significant part of the year for RBC. On the whole, 2011 should be the first year after the economic downturn, when RBC demonstrates its achievements in terms of the business profitability growth,” German Kaplun added.

Breakdown of the company’s revenue in the second quarter of 2011

RUB million Q2 2011 Q2 20102 Change (%)
Internet 739 478 55%
  - Advertising 557 318 75%
  - Services 182 160 14%
Television 142 117 21%
Printed Publications 225 217 4%
  - Business Publications 88 84 5%
  - Salon Press Publishing House 137 133 3%
Total revenue 1 106 812 36%

Breakdown of the company’s revenue in the first half of 2011

RUB million H1 20112 H2 20102 Change (%)
Internet 1 264 892 42%
  - Advertising 903 559 62%
  - Services 361 333 8%
Television 256 189 35%
Printed Publications 439 381 15%
  - Business Publications3 173 127 36%
  - Salon Press Publishing House 266 254 5%
Total revenue 1 959 1 462 34%

Revenue and EBITDA. RBC’s total revenue rose 36% in the second quarter of 2011 compared to the same period of 2010, reaching RUB 1,106m. The growth of revenue is primarily attributable to high demand for the placement of advertising on RBC’s online resources. It also reflects price increases for advertisements placed on RBC’s media resources, which were introduced as a result of the growth of the company’s audience ratings, against the backdrop of continuing positive development trends of the Russian advertising market.

RBC’s EBITDA amounted to RUB 107m in the second quarter thanks to exceeding revenue growth as compared to the company’s expenses. Based on the results in the first half of 2011, RBC became EBITDA-positive. The growth of RBC’s profitability will continue in the second half of the year.

Internet. Internet revenue increased 56% in the second quarter of 2011 compared to the same period of 2010, reaching RUB 739m. This growth is due to further expansion of RBC’s Internet audience and an average 18% increase in the price for advertisements placed on the company’s Internet resources that was introduced in February of this year, as well as to continued revenue growth of the company’s online services, such as web hosting, domain name registration and e-payment system RBK Money. RBC’s online advertising revenue increased 75% to RUB 557m. The revenue of the company’s online services, 70% of which is generated by the web hosting and domain names registration business, grew 14% to RUB 182m.

During the reporting period, RBC concentrated its efforts on the development and launch of mobile applications of its main Internet resources, and introduced more than 10 applications for different mobile platforms. RBC has also revamped its entertainment portal Qip.ru, by launching new design and expanding the site’s functionality. As part of the consolidation of RBC’s non-business resources and services on Qip.ru, Borda.ru website – a leader in the segment of free forum hosting – has also been incorporated into the portal.

RBC’s aggregate Internet audience reached 48.2m users as of the end of the second quarter, up 24% year-on-year. RBC remains the fourth largest player on the Russian Internet market in terms of Russian audience, which stood at 18.3m users in June. The audience of Rbc.ru business portal expanded 41% year-on-year to 15.2m users as of the end of June 2011. The number of users of RBC’s non-business resources went up 30% year-on-year to 44.3m in June, primarily thanks to a 48% increase in the audience of Qip.ru portal to 17.5m users.

Due to RBC’s audience expansion, high demand on the part of advertisers and an overall growth of the advertising market, RBC made a decision to make an additional increase of advertising rates for its Internet resources by 15-25% on average, effective September 1, 2011.

Television. RBC TV’s revenue climbed 21% to RUB 142m in the second quarter of the year. The channel’s increase in revenue is primarily attributable to RBC TV’s continuing expansion of its audience and an average 15% rise in the cost of placing advertisements on the channel at the beginning of the year.

As of the end of the reporting period, the channel’s monthly audience in Russia amounted to 16.4m viewers, having increased 9% since June 2010, according to TNS. The number of viewers in Moscow stood at 4.3m (representing approximately one-third of the capital’s inhabitants) in June.

RBC continued preparations for the new TV season, completing the construction of a new modern studio complex and launching a new programming grid. All the changes were made in time and successfully introduced on September 5. Along with it, RBC expanded RBC TV’s presence online and on mobile devices. In particular, RBC TV launched a new online broadcasting technology, increased the number of videos published in the Internet and on mobile platforms. On the whole, the number of RBC TV videos viewed online has approximately tripled since June 2010.

The launch of the new studio and an updated broadcasting schedule as well as the expansion of RBC TV in the Internet are all set to increase RBC TV’s ratings, expand its client base and improve sell-out ratio, leading to a significant revenue growth of the channel next year.

Printed Publications. The revenue of RBC’s printed publications rose 4% to RUB 225m in the second quarter. The slowdown in revenue growth in the second quarter compared to the first quarter is attributable to the fact that part of Japanese automakers postponed their advertising spending until autumn as a result of the earthquake. According to the company’s advertising budgets plan, the revenue of RBC’s print media business will accelerate in the second half of the year.

RBC’s key business publications delivered strong ratings in the reporting period. Specifically, RBC daily newspaper still ranks among the top three most popular business publications in Moscow, while RBC magazine is the leader among business publications in Moscow. Idei Vashego Doma and Salon-interior magazines also retained their leadership positions among interior publications.

Outlook for 2011. Remaining committed to its conservative approach, RBC doesn’t update at this point its 2011 forecast: the rise in consolidated revenue is estimated to be at least 30% in 2011. The biggest increase is expected in the Internet segment. The company’s expenses are expected to grow much slower than its revenue.

Cautionary note regarding forward-looking statements

Some of the information in this press release may contain statements of future expectations and other forward-looking statements. These expectations are based on the management's current views and assumptions, and involve known and unknown risks and uncertainties. It is possible that the company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the firm's future results, see “Risk Factors” in the company’s latest Annual Report on www.rbcholding.com. RBC assumes no obligation to update any forward-looking information contained in this document.

1 TNS data

2 Financials are based on the IFRS management report (unaudited)

3 Business publications include newspaper RBC daily, magazines RBC, Nashi Dengi and CNews


Press and investor contacts:
Egor Timofeev
Tel: +7 (495) 363-1111
Email: pr@rbc.ru
Web: www.rbcholding.com