Press releases | Archive 2007
RBC delivers dynamic revenue growth of 69% in the first six months of 2007RBC delivers dynamic revenue growth of 69% in the first six months of 2007
- RBC's revenue increases 69% to $76.9m in the first six months of the year due to strong Internet and print media ad sales expansion backed by audience growth
- The audience expansion in the Internet and print media segments enables the company to raise prices on RBC's business-related websites and in the RBC magazine
- RBC TV wins CNN World Report Award for the Best Business Report
- The company reconfirms its outlook for 2007: total revenue is expected to reach about $166-180m, EBITDA is estimated at a level of $55-62m (excluding investments in new projects)
Revenue for the 1st half of 2007
|$'000 000||1st half 20071||1st half 20061||Growth (%)||Forecast 2007|
1 - Based on management accounts in accordance with IFRS (unaudited).
Moscow, September 17, 2007 - OAO RBC Information Systems (RTS, MICEX: RBCI) reported preliminary financial results for the first six months of 2007 today. Commenting on the results, German Kaplun, RBC Chairman and CEO, said: "I am pleased with RBC's dynamic performance in the first half of the year, which was supported by a strong audience expansion in the second quarter, despite it is traditionally a seasonally weaker period. All of the company's business units delivered solid double-digit revenue growth in the period under review, demonstrating again the efficiency of our business model. On the whole, I am very positive about this year and strongly believe in our success in all media segments, where RBC operates. Going forward, we plan to continue building up our TV and print media audiences, along with implementation of numerous projects in the Internet."
Revenue. In the first six months, the company's total revenue surged 69% from $45.4m in 2006 to $76.9m, due to growing advertising sales, which were backed by price increases and strong core audience expansion in the Internet, TV and print. In the total revenue mix for H1 2007, Media Services (Internet advertising & subscription and marketing communications) contributed 56.2% and RBC TV generated 23.3%, while the remaining 20.5% came from Print Publications.
Media Services. RBC's revenue from Media Services increased 45% from $29.7m in 2006 to $43.2m from significant growth primarily in the field of Internet advertising.
RBC has the largest business audience on the Russian Internet, and remains one of the most attractive and efficient advertising platforms on the market as a result. Continued strong demand for advertising in the first quarter of the year prompted an upturn in advertising rates on RBC's business-related online resources by 18% on average at the beginning of April. The company is planning its next price increase for September 2007.
Additionally, the publication of the print version of RBC Daily gave momentum to advertising sales of the newspaper's online version, which in turn supported the Internet revenue growth in the second quarter. In order to provide the online newspaper with extra advertising spots, the company in June launched RBC Daily Weekend, a thematic supplement, providing information on lifestyle, restaurants, shops and the most interesting cultural events in Moscow, thus helping RBC Daily's readers to plan their weekends.
In the period under review, RBC held an annual ceremony and announced the Finansoviy Olymp-2006 winners, following the successful acquisition of rights in 1Q2007 to organize this contest. Overall, the marketing communications and Internet subscription branches have continued to show sustainable growth in line with the management's expectations.
RBC TV's revenue grew 14% to $17.9m in the first six months of 2007. The slowdown of the revenue growth in the second quarter of 2007, as compared to the first quarter of the year, was in line with the trend observed on the Russian TV market. The deceleration of the channel's revenue growth occurred due to the fact that some clients reallocated part of their advertising budgets from the second to the third quarter of the year. Therefore, the company's management is confident in achieving the year-end sales target by the channel.
At the same time, the channel's core audience has expanded significantly. According to the latest research conducted by COMCON in May 2007, RBC TV's monthly audience increased 30% in a single year to reach 10.0m viewers. RBC TV's weekly audience gained 44%, rising from 5.3m people in May 2006 to 7.6m in 2007, while the most significant growth was among the daily viewers of the channel. Daily viewership rose 58% from 2.8m people to 4.4m, due to an impressive increase (by 79%) in the number of viewers who watch the channel on weekends. The significant increase of RBC TV's audience will enable the channel to raise prices by 25% on average in September 2007. In order to further enhance the overall viewer statistics, RBC plans to start adding local content to RBC TV's program schedule in major Russian cities. For example, since September 2007 RBC will introduce this practice in Saint Petersburg.
In the second quarter, RBC continued broadening the penetration of RBC TV's signal in Moscow via the Mostelecom network. The company plans to reach more than 50% of the Moscow audience (approximately 1.8m households) by September 2007. RBC management expects that, in 2008, the TV channel will benefit from the enhanced distribution of its signal in Moscow, coupled with the anticipated strong media inflation on the national TV channels, which may prompt clients to seek more targeted advertising placement on niche channels.
In June, RBC TV received acclaim for its work from CNN. The channel won the international 2007 CNN World Report Award for the best business report (Oil Resources in Siberia) for CNN's weekly program World Report, which made RBC TV the only Russian winner of this annual competition and one of the four CNN's most professional international partners.
Print publications. Revenue from RBC's print media resources reached $15.8m in the first half of 2007, $12.5m of which were contributed by EDI S PRESS Holding, the publisher of interior and design and other non-business magazines. RBC's print media business's dynamic performance was secured by further development of the company's business titles and their growing popularity among the target audiences, and backed by sustainable revenue growth delivered by EDI S PRESS Holding.
According to TNS Gallup Media, the average issue readership (AIR) of the RBC Daily business newspaper in Moscow rose 45% to 97,100 people over a period from March to July 2007, against the results of the first survey2. The average issue readership of the RBC magazine went up 35% from 158,300 to 193,700 people, while the Russian audience of the title amounted to 289,200 readers. RBC magazine's rapidly-growing readership enabled the company to raise advertising prices by 20% on average in April 2007.
Additionally, in response to very high demand for advertising from car manufacturers and dealers, in the summer the company began publishing a print version of its popular Internet site about cars, AutoNews. The new magazine features 112 pages and has a combined initial circulation of 100,000 copies. The business model of the magazine is primarily based on advertising. RBC expects that AutoNews magazine will reach profitability levels quickly by actively exploiting cross-selling opportunities and other synergies with the company's Internet resources.
Outlook for 2007. Based on the strong performance of the company and upward advertising market trends, RBC reconfirms its earlier revenue outlook for 2007. The company is expected to receive a total revenue of about $166m - $180m. This figure is projected to consist of about $92m - $100m from Media Services (including $6-7m from new Internet sites and services), around $43-47m from RBC TV, and approximately $31-33m from print publications. EBITDA of the company's existing business is estimated to reach $55-62m (excluding investments in new projects). At a consolidated level, EBITDA is expected to amount to $25-30m (including the impact of investments).
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.
2 - The first survey with the inclusion of RBC's business titles was conducted by TNS Gallup Media for the period of December 2006 through February 2007.