Central European Media Enterprises Ltd. Reports Second Quarter and First Half 2011 Results

SECOND QUARTER
- Net Revenues of US$ 249.7 million up 24%
- OIBDA¹ of US$ 62.7 million up 36%

FIRST HALF
- Net Revenues of US$ $422.4 million up 22%
- OIBDA¹ of US$ 76.9 million up 64%
- Positive Free Cash Flow² of $14.8 million

HAMILTON, Bermuda, July 27, 2011 (GLOBE NEWSWIRE) -- Central European Media Enterprises Ltd. ("CME" or the "Company") (Nasdaq:CETV) (Prague Stock Exchange:CETV) today announced financial results for the three months and six months ended June 30, 2011.

Net revenues for the second quarter of 2011 increased US$ 47.9 million to US$ 249.7 million compared to the second quarter of 2010. OIBDA¹ for the quarter increased by US$ 16.5 million to US$ 62.7 million. Operating income for the quarter increased by US$ 14.0 million to US$ 39.5 million. Net income from continuing operations for the quarter improved to US$ 0.8 million compared to a loss of US$ (52.9) million for the second quarter of 2010.

Net revenues for the six months ended June 30, 2011 increased US$ 77.1 million to US$ 422.4 million compared to the first half of 2010. OIBDA¹ for the first half increased by US$ 29.9 million to US$ 76.9 million. Operating income for the six months increased by US$ 25.5 million to US$ 31.8 million. Net loss from continuing operations for the half year improved to US$ (20.2) million compared to US$ (94.9) million for the first half of 2010. Free cash flow for the six months ended June 30, 2011 improved to US$ $14.8 million from US$ (40.0) million.

Adrian Sarbu, CME's President and CEO commented: "Our Revenues and OIBDA increased 24% and 36% respectively. This improvement was driven by our strong brands, leading audience shares in broadcasting and fast growth in Media Pro Entertainment and New Media divisions. Our operations performed better than advertising markets which in Q2 contracted by 3%. However, based on continuing improvements in macroeconomic indicators, we foresee a growth trend in all our TV advertising markets in the second half of the year. We are best positioned in the region to take advantage of this trend and deliver growth in Revenues, OIBDA and free cash flow."

^{1 OIBDA is operating income before depreciation and amortization as defined in 'Segment Data' below.  Consolidated OIBDA, which is set out here, is equal to the OIBDA for each of our segments less central costs (which include non-cash stock-based compensation).  We define OIBDA margin as the ratio of OIBDA to Net Revenues.}

^{2 Free cash flow is defined as cash flows from continuing operating activities less purchases of property, plant and equipment, net of disposals of property, plant and equipment.}

Consolidated Results for the Three Months Ended June 30, 2011

Net revenues for the three months ended June 30, 2011 increased by 23.8% to US$ 249.7 million from US$ 201.7 million for the three months ended June 30, 2010.  Operating income for the quarter was US$ 39.5 million compared to US$ 25.5 million for the three months ended June 30, 2010.   Net income from continuing operations for the quarter was US$ 0.8 million compared to a loss from continuing operations of US$ (52.9) million for the three months ended June 30, 2010.  Fully diluted income from continuing operations per share for the three months ended June 30, 2011 increased by US$ 0.84 to US$ 0.02.

OIBDA for the three months ended June 30, 2011 increased to US$ 62.7 million from US$ 46.2 million in the three months ended June 30, 2010. OIBDA margin for the three months ended June 30, 2011 was 25.1% compared to 22.9% in the three months ended June 30, 2010.

Headline Consolidated Results for the three months ended June 30, 2011 and 2010 were:

1 Number is not meaningful.

Consolidated Results for the Six Months Ended June 30, 2011

Net revenues for the six months ended June 30, 2011 increased by 22.3% to US$ 422.4 million from US$ 345.4 million for the six months ended June 30, 2010.  Operating income for the six months was US$ 31.8 million compared to US$ 6.3 million for the six months ended June 30, 2010.  Net loss from continuing operations for the half year was US$ (20.2) million compared to a net loss of US$ (94.9) million for the half year ended June 30, 2010.  Fully diluted loss from continuing operations per share for the six months ended June 30, 2011 improved by US$ 1.12 to US$ (0.31).

OIBDA for the six months ended June 30, 2011 increased to US$ 76.9 million from US$ 47.0 million in the six months ended June 30, 2010. OIBDA margin for the six months ended June 30, 2011 was 18.2% compared to 13.6% in the six months ended June 30, 2010.

Headline Consolidated Results for the six months ended June 30, 2011 and 2010 were:

Segment Results

We evaluate the performance of our operations based on Net Revenues and OIBDA.

Our Net Revenues and Consolidated OIBDA for the three months ended June 30, 2011 and 2010 were:

Our Net revenues and Consolidated OIBDA for the six months ended June 30, 2011 and 2010 were:

1 Number is not meaningful. 

CME will host a teleconference and video webcast to discuss its second quarter results on Wednesday, July 27, 2011 at 9:00 a.m. New York time (2:00 p.m. London time and 3:00 p.m. Prague time). The video webcast and teleconference will refer to presentation slides which will be available on CME's website at www.cetv-net.com prior to the call.

To access the teleconference, U.S. and international callers may dial +1 785-424-1051 ten minutes prior to the start time and reference passcode 7CETVQ2.  The conference call will be video webcasted live via www.cetv-net.com.

The video webcast and a digital audio replay in MP3 format will be available for two weeks following the call at www.cetv-net.com. In the coming weeks, CME will post the results for the quarter ended June 30, 2011 for its wholly-owned subsidiary CET 21 spol. s r.o. at www.cetv-net.com.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated.  Forward-looking statements reflect our current views with respect to future events and because our business is subject to such risks and uncertainties, actual results, our strategic plan, our financial position, results of operations and cash flows could differ materially from those described in or contemplated by the forward-looking statements.

For a more detailed description of these uncertainties and other factors, please see the "Risk Factors" section in CME's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011, which was filed with the Securities and Exchange Commission on July 27, 2011. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise.

This press release should be read in conjunction with our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011, which was filed with the Securities and Exchange Commission on July 27, 2011.

We make available free of charge on our website at www.cetv-net.com our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

CME is a vertically integrated media company operating a leading broadcast, content and new media business in six Central and Eastern European countries with an aggregate population of approximately 50 million people. CME's television stations are located in Bulgaria (bTV, bTV Cinema, bTV Comedy, bTV Action and Ring.bg), Croatia (Nova TV, Doma and Nova World), the Czech Republic (TV Nova, Nova Cinema, Nova Sport and MTV Czech), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, PRO TV Chisinau, Sport.ro and MTV Romania), the Slovak Republic (TV Markíza and Doma) and Slovenia (POP TV, Kanal A and POP Brio). CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol "CETV". 

For additional information, please visit www.cetv-net.com.

Segment Data

We manage our business on a divisional basis, with three operating segments which are also our reportable segments: Broadcast, Media Pro Entertainment (our content division) and New Media.

We evaluate the performance of our segments based on Net Revenues and OIBDA. OIBDA, which includes program rights amortization costs, is determined as operating income / (loss) before depreciation and amortization of intangible assets. Items that are not allocated to our segments for purposes of evaluating their performance and therefore are not included in their OIBDA, include stock-based compensation and certain unusual or infrequent items (e.g. impairments of assets or investments).  We believe OIBDA is useful to investors because it provides a more meaningful representation of our performance, as it excludes certain items that do not impact either our cash flows or the operating results of our operations.  OIBDA is also used as a component in determining management bonuses. Intersegment revenues and profits have been eliminated in consolidation.  OIBDA may not be comparable to similar measures reported by other companies. 

Below are tables showing our Net Revenues and OIBDA by segment for the three and six months ended June 30, 2011 and 2010, together with a reconciliation of OIBDA to our Condensed Consolidated Statement of Operations:

¹ Reflects revenues earned by the Media Pro Entertainment segment through sales to the Broadcast segment. All other revenues are third party revenues.