Like in the first quarter of the year, the strength of the Pay TV business and of the Latin American Education and Radio businesses allow to compensate the weakness in the advertising markets of Spain and Portugal
- The Pay TV business continues to demonstrate its operating strength: stable revenues with an 8.8% growth in recurring EBITDA. Subscribers (Satellite, OTT and those from other operators) grow by 40,968 since June 2011, Satellite ARPU stands at 41.7 Euros on average in the second quarter of the year.
- Santillana increases its EBITDA by 5.6% adjusted by non-recurring items. We highlight the strong growth of its LatAm revenues (+8,2%).
- The company maintains its effort in the Digital development. Digital advertising revenues grow by 14.4%. We highlight the growth of the press division (+24.1%) which accounts for 18.1% of total advertising revenues for this division. El País increases in June its leadership position in Spanish internet, reaching 7.6 million average users.
- Advertising revenues in Spain and Portugal fall by 15.7% and reach 220.45 million Euros, accounting for 17.3% of the total PRISA revenues.
- LatAm revenues grow by 10% and represent already 26.8% of the Group’s revenues, compared to the 23% of the first half of 2011. Recurring EBITDA from this region grows by 11.5% and reaches 48.2% of total Group EBITDA.
- Good cost control is maintained, and excluding Amortisations and Provisions, costs are reduced by 5.5% in the first half of this year (4.2% adjusted by extraordinary items).
- The group generated Operating Cash Flow of 187.42 million Euros in the first half of 2012 vs the 11.1 million Euros of the first half of 2011. CAPEX has been cut by 46.11 million Euros vs 1H 2011.
- Two important recapitalisation deals have been approved by the Company in its Annual Shareholders’ Meeting on June 30th 2012: the change in the conditions of the minimum preferred dividend for non-voting convertible B shares, and the issue of 2 mandatory convertible bonds into A shares. These deals reduce the Company’s leverage by some 650 million Euros in 2014 compared to what it would have been without these deals, relieve its liquidity situation short term, limit dilution in the recapitalisation as the deals have been done above market prices, and demonstrate the support of both the Company’s creditor entities and strategic partner.
PRISA today announced its financial and operational results for the fiscal quarter ended June 30, 2012. In the period, the Group achieved revenues of 1.277,59 million Euros and an EBITDA of 105.14 million Euros. The solid performance of the Pay TV and the Education businesses, together with the growth from our Latin America exposure, have compensated the weakness of the advertising markets in Spain and Portugal, which are being affected by the economic crisis in both countries, although they represent less than 17.3% % of the Group’s revenues.
Strong effort in cost control: In the first half of 2012, operating expenses, excluding amortisation and provisions, have fallen by 5.5% (4.2% adjusted by extraordinary items).
Main figures by business area:
- Pay TV: EBITDA growth and improving performance indicators: In the Audiovisual division, revenues reach 594.00 million Euros and EBITDA 103.37 million Euros, with a strong growth in Pay TV (+8.8%, adjusted by extraordinary items). The first half of 2012 shows important improvements in its Key Performance Indicators despite the second quarter being seasonally weak given the end of the Spanish football league competition (May):
- 1.831 million Pay TV subscribers, with 100,209 from other operators and OTT.
- Net adds in subscribers from other operators grow by 17,962 (+11,388 in 1H 2011).
- Satellite ARPU stands at 41.71 Euros on average in the second quarter (41.2 Euros in 2Q 2011).
- Churn stands at 14.0% (14.2% at June 2011).
- iPlus subscribers already reach 33.2% or 574,440 subscribers (415,735 at June 2011).
- Education: Strong growth in Latin America: Revenues (335.31 million Euros) grow by 5.1% with strong growth in Latin America (+8.2%). We highlight the growth of Mexico (+9.4%), Argentina (+13.1%), Chile (+6.4%), USA (+28.6%), Uruguay (+28.7%) or Peru (+109.2%) and the lower contribution of Brazil on the back of its cycle (-5.5%). Recurring EBITDA reaches 84.44 million Euros (+5.6%), with a slight improvement of 10 basis points in its EBITDA margin which reaches 25.2% (compared to the 25.1% of the first half of 2011).
- Radio: Strong growth in Latin America partly compensates the weakness in Spain. Revenues (169.55 million Euros) fall by 8.4% versus the first half of 2011 given mainly the lower advertising revenues in Spain (-15.8%, where local advertising maintains its weakness, -25.2% and we see a deterioration of national advertising, -6.4%) and despite the strong growth in Latin American advertising (+13.5%) with a strong performance in Colombia (+14.6%), Chile (+9.2%), Mexico (+20.6%) and Argentina (+34.4%).
- Press: Weakness in the advertising market and harder comps. Press revenues stand at 169.03 million Euros, 20.7% lower than the first half of 2011. This is explained by the weakness in advertising (-15.3%), the lower circulation numbers (-12.2%), as well as the positive impact that promotions and fiscal deductions had in the first half of 2011 (which amounted to 14.51 million Euros in 1H 2011 and 0.31 million Euros in 1H 2012). Recurring EBITDA reaches 13.40 million Euros.
- Digital Business: Solid growth. Digital advertising shows a growth of 14.4% in the first half of 2012. The digital area received a monthly average number of daily browsers of 71.1 million, which represents a growth of 8.2% versus the first half of 2011. This is thanks to the strong growth in Prisa Television, El Pais.com and Cinco Días.com.
- Advertising: lower weight. Advertising revenues reached 282.21 million Euros, a 10.7% fall compared to the first half of 2011, and account for 22% of total group revenues (compared to the 23.4% of the first half of 2011). We highlight the growth in Latin American advertising of +13.5%, which represent 21.9% of all advertising revenues (17.2% in 1H 2011).
The comparison of 2012 and 2011 results is affected by extraordinary items recorded under both revenues and expenses:
- Consolidation of Dédalo which from April 1st 2012 is included through global consolidation instead of equity consolidated.
- Redundancy expenses on the back of the efficiency plan undertaken since December 2010.
- The 54.37 million Euro provision recorded on the back of the agreement with ONO.
To conduct a homogeneous comparison, we are presenting a profit and loss account adjusting these extraordinary items.