Press releases | Archive 2003
RBC delivers strong double-digit growth in the first half of 2003 with media business as the main revenue generator
- RBC revenue up 35% in the first half of 2003, which is considerably more than projected by the management for the full year 2003
- Net income, excluding losses associated with the TV project, rises 68% as compared to the first six months of 2002
Consolidated key figuresFirst half 2003 results
2 Net income figure does not include losses associated with the TV project
Moscow, July 23, 2003 - Today RBC Information Systems (RTS: RBCI; MICEX: RU14RBCI4001) reported its preliminary results for the first six months of 2003, reflecting the strategic importance of its Media business, which is being expanded through the launch of Russia's first business TV channel on September 2, 2003.
German Kaplun, Chairman and CEO of RBC, said: "I am pleased to announce that RBC is maintaining its leadership in the business media and information technology markets in Russia. We are continuing to increase our product range both in media and IT, build up our sales force and increase RBC brand recognition among business audience. All this yielded healthy gains in the markets we operate and allowed the company to deliver a stronger than anticipated sales growth in the first six months of 2003. Maintaining a conservative approach to financial projections, the management reiterates its forecast of a 25% growth in revenues from existing businesses in 2003."
Continuing strong performance in Media Services lifted RBC revenues 35% from $13.4m in the first half of 2002 to $18.1m in the period under review. In the total 1H2003 revenue mix of the company, the media business accounted for 61%, with the rest coming from IT Services.
In the first half of 2003 the company continued to focus on economically active audience. Driven by strong RBC brand recognition, overall growth in online advertising budgets and by the trend among RBC's clients to increasingly use RBC not only as an advertising site, but rather as an advertising agency, the company's media business delivered an impressive growth of 80% from $6.2 in the first six months of 2002 to $11.1 in the year to June.
In June RBC launched Quote Total, RBC's first product in a range of expensive information systems intended for financial market professionals. The terminal provides the latest news, stock exchange and over-the-counter quotes, various indices, expert commentaries and reviews, fundamental and technical analysis as well as key macroeconomic indicators and a database on over 4,000 issuers. RBC management expects Quote Total to boost information service revenues, substantially increase average revenue per user in 2003 and will ensure future growth of information services revenues.
In February RBC published the first issue of the analytical business newspaper RBC Daily. The new information resource increased the volume of publicly available analytical information provided by RBC and significantly broadened the business audience of the company. In a few months since the launch, the daily readership of RBC Daily reached 60,000 Internet users.
Revenue from the IT business, consisting of general and offshore programming and system integration, basically remained at the level of the first six months of 2002. Aggressive marketing allowed the company to substantially increase its portfolio of orders in the private and public sectors but the majority of them spilled over to the second half of the year. This factor warrants IT revenue to be in line with the overall top-line growth by the end of the year.
Excluding the impact of the TV project, net income rose 68% from $3.3m in the first six months of 2002 to $5.5m in the first half of 2003.
The costs structure of the company remained essentially unchanged, with cost of sales increasing in line with revenues throughout the first six months of 2003. Distribution costs significantly reduced as compared to the same period of 2002 when RBC had a number of one-off expenses. This enabled the company to improve its net profit margin from 24% in the first half of 2002 to 30% in the period under review.
TV project financing
A vigorous investment strategy is being pursued to broaden RBC's information delivery channel through establishing RBC TV that will dramatically enhance the company's media position. RBC TV, which is wholly owned by RBC Information Systems, was capitalized with $10m in equity, which came from the parent company, and $6m in debt from Western investors. Importantly, the debt portion is not guaranteed by RBC itself and thus does not represent its direct debt obligation.
Changes in reporting format
RBC foresees changing over to segment reporting when presenting its full-year 2003 results to aid investors' understanding of the investments that the company has made. RBC will separate the financial performance of RBC TV from its core operating businesses because these investments are in development-stage television project. The company believes that this format of reporting will allow investors to more accurately value the different elements of its activities.
Cautionary note regarding forward-looking statementsSome of the information in this press release may contain statements of future expectations and other forward-looking statements. These expectations are based on 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 IPO Circular on www.rbcinfosystems.com. RBC assumes no obligation to update any forward-looking information contained in this document.