Press releases | Archive 2008
RBC Information Systems provides update on current tradingMoscow, October 14, 2008 - This statement provides a trading update on RBC's progress in the 3rd quarter 2008, since the company last reported results for the 2nd quarter in August 2008.
All RBC's divisions, including Internet advertising & services, print publications and the RBC TV station, continued stable operations throughout the 3rd quarter of 2008.
In the period under review, the company's business information resources demonstrated significant audience expansion on the back of the growing demand for financial information in the time of financial markets turmoil. As planned initially, RBC lifted prices for advertising on its business-related online resources by 10% on average effective September 1, 2008. In the mass market Internet segment, RBC continued its M&A activities and launched the children's social network Tvidi.ru, which is aimed to become the largest online media project for children in Russia. In the television segment, the company increased advertising time on RBC TV and raised advertising prices by 15% on average. On the print media front, RBC's flagship business and design & architecture titles, such as the RBC magazine, RBC Daily, Idei Vashego Doma and Salon Interior, reached very strong audience ratings, according to the latest audience survey published by TNS Gallup Media.
As October progresses, the company does not see the worsening of advertising revenue conditions, but remains vigilant with respect to further developments in the advertising industry. A risk of budget cuts by some of its ad clients caused RBC to put a stronger focus on conservative cash management to secure its liquidity position and implement a number of cost-saving initiatives. In particular, RBC has reduced its personnel by about 10% of the total headcount and optimized other operating costs. These steps are expected to yield economies of about 20% in 2009.
The company is also restructuring some of its early stage investment projects with unprofitable revenue. For example, RBC is changing the format of AutoNews (car magazine) and Square Meter (real estate news magazine) into quarterly supplements to the RBC Daily business newspaper, and simultaneously strengthens their online versions. A number of TV programs with low audience ratings will be replaced by more popular daily programs. RBC is also planning to partially cut costs associated with regional Internet projects, which have been launched recently.
Overall, RBC continues to trade profitably in its core business. However a portfolio of securities held by the company has been strongly affected by unprecedented weakness and volatility in the financial markets. RBC proposes to take an impairment charge on certain of these investments due to the continuing deterioration of the situation in world financial markets. The company has taken appropriate measures to protect itself against any further diminution in the value of these investments. Given the current global and Russian market conditions, RBC is cautious about full-year 2008 results and projections for 2009.
"RBC's core business remains strong and continues stable operations. We are convinced that our diverse product portfolio, unique market position and broad client base will enable us to take advantage of long-term positive trends on the Russian media market," said RBC Chairman German Kaplun.
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.rbcinfosystems.com. RBC assumes no obligation to update any forward-looking information contained in this document.