GRUPO RADIO CENTRO SAB DE CV 
By MEXICO CITY, July 20, 2011 /PRNewswire/ -- Grupo Radio Centro, S.A.B. de C.V. (NYSE: RC, BMV: RCENTRO-A) (the "Company"), one of Mexico's leading radio broadcasting companies, announced today its results of operations for the second quarter and first half ended June 30, 2011. All figures were prepared in accordance with International Financial Reporting Standards (IFRS).
Second Quarter Results
The Company's broadcasting revenue for the second quarter of 2011 totaled Ps. 230,431,000, a 10.5% increase compared to the Ps. 208,589,000 reported for the second quarter of 2010. This increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico, who purchased more airtime during the second quarter of 2011 compared to the same period of 2010.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the second quarter of 2011 totaled Ps. 167,542,000, a slight increase compared to the Ps. 167,245,000 reported for the second quarter of 2010.
The Company's broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the second quarter of 2011 totaled Ps. 62,889,000, a 52.1% increase compared to the Ps. 41,344,000 reported for the second quarter of 2010. This increase was attributable to the increase in broadcasting revenue described above.
The Company's depreciation and amortization expenses in the second quarter of 2011 totaled Ps. 5,577,000, a 9.2% decrease compared to the Ps. 6,145,000 reported for the second quarter of 2010. This decrease was attributable to a reduction in the amount of depreciable assets during the second quarter of 2011 as compared to the same period of 2010.
The Company's corporate, general and administrative expenses in the second quarter of 2011 totaled Ps. 3,779,000, the same amount reported for the second quarter of 2010.
The Company's operating income for the second quarter of 2011 totaled Ps. 53,533,000, a 70.4% increase compared to the Ps. 31,420,000 reported for the second quarter of 2010. This increase was mainly due to the increase in broadcasting income described above.
The Company's other expenses, net, for the second quarter of 2011 totaled Ps. 16,183,000, a 24.4% increase compared to the Ps. 13,010,000 reported for the second quarter of 2010. This increase was mainly attributable to non-recurring expenses and legal expenses during the second quarter of 2011.
The Company's comprehensive financing cost in the second quarter of 2011 totaled Ps. 5,624,000, a slight increase compared to the Ps. 5,480,000 reported for the second quarter of 2010.
The Company's income before income taxes in the second quarter of 2011 totaled Ps. 31,726,000, a 145.4% increase compared to the Ps. 12,930,000 reported for the second quarter of 2010.
The Company's income taxes totaled Ps. 15,339,000 in the second quarter of 2011, a 56.4% increase compared to the Ps. 9,809,000 reported for the second quarter of 2010. This increase was due to an increase in taxable income during the second quarter of 2011 as compared to the same period of 2010.
As a result of the foregoing, the Company's net income in the second quarter of 2011 totaled Ps. 16,387,000, more than five times the Ps. 3,121,000 of net income reported for the second quarter of 2010.
First Half Results
The Company's broadcasting revenue for the six months ended June 30, 2011 totaled Ps. 419,197,000, an 11.8% increase compared to the Ps. 374,870,000 reported for the same period of 2010. This increase was mainly attributable to an increase in advertising expenditures by the Company's clients, who purchased more airtime during the first half of 2011 than in the same period of 2010.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2011 totaled Ps. 338,198,000, a 3.1% increase compared to the Ps. 328,028,000 reported for the same period of 2010. This increase was primarily due to (i) higher research and promotion costs, (ii) increased production costs of talk shows, and (iii) higher commissions paid to the Company's sales force and to advertising agencies due to higher broadcasting revenue, in each case, in the first half of 2011 compared to the same period of 2010.
The Company's broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2011 totaled Ps. 80,999,000, a 72.9% increase compared to the Ps. 46,842,000 reported for the same period of 2010.
The Company's depreciation and amortization expenses for the first six months of 2011 totaled Ps. 11,188,000, a 9.0% decrease compared to the Ps. 12,289,000 reported for the same period of 2010. This decrease was due to a reduction in the amount of depreciable assets in the first half of 2011 compared to the same period of 2010.
The Company's corporate, general and administrative expenses for the first six months of 2011 totaled Ps. 7,557,000, the same amount reported for the same period of 2010.
As a result of the foregoing, the Company recorded operating income of Ps. 62,254,000 for the first six months of 2011, a 130.6% increase compared to the Ps. 26,996,000 reported for the same period of 2010.
The Company's other expenses, net, for the first six months of 2011 totaled Ps. 31,203,000, a 17.9% increase compared to the Ps. 26,465,000 reported for the same period of 2010. This increase was mainly attributable to non-recurring expenses and legal expenses in the first half of 2011 compared to the same period of 2010.
The Company's comprehensive cost of financing for the first six months of 2011 totaled Ps. 10,384,000, a decrease of 19.1% compared to the Ps. 12,840,000 reported for the same period of 2010. This decrease was mainly attributable to a reduction in the interest expense paid in the first half of 2011 resulting from a reduction in the annual interest rate of the Company's loan with Banco Inbursa, S.A. from 13% through March 18, 2010 to 9.5% thereafter combined with a reduction in the principal amount of such loan.
The Company's income before income taxes for the first six months of 2011 totaled Ps. 20,667,000, a significant increase compared to the loss before taxes of Ps. 12,309,000 reported for the same period of 2010. This increase was mainly due to the aforementioned increase in broadcasting revenue.
The Company's income taxes for the first six months of 2011 totaled Ps. 21,576,000, a 77.3% increase compared to the Ps. 12,167,000 recorded for the same period of 2010. This increase was mainly due to an increase in taxable income in the first half of 2011 compared to the same period of 2010.
As a result of the foregoing, the Company recorded a net loss of Ps. 909,000 in the first six months of 2011, compared to a net loss of Ps. 24,476,000 for the same period of 2010.
Recent Events
As of January 1, 2011, the Company adopted the IFRS applicable to its financial information. Financial results included in this press release from both the first half of 2011 and the first half of 2010 were prepared based on such standards and are fully comparable.
Company Description
Grupo Radio Centro owns and/or operates 15 radio stations. Of these 15 radio stations, 12 are located in Mexico City, two AM stations in Guadalajara and Monterrey, and one FM station in Los Angeles. The Company's principal activities are the production and broadcasting of musical and entertainment programs, talk shows, news and special events programs. Revenue is primarily derived from the sale of commercial airtime. In addition to the Organizacion Radio Centro radio stations, the Company also operates Grupo RED radio stations and Organizacion Impulsora de Radio (OIR), a radio network that acts as the national sales representative for, and provides programming to 110 Grupo Radio Centro-affiliated radio stations throughout Mexico.
Note on Forward Looking Statements
This release may contain projections or other forward-looking statements related to Grupo Radio Centro that involve risks and uncertainties. Readers are cautioned that these statements are only predictions and may differ materially from actual future results or events. Readers are referred to the documents filed by Grupo Radio Centro with the United States Securities and Exchange Commission, specifically the most recent filing on Form 20-F, which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements are based on information available to Grupo Radio Centro on the date hereof, and Grupo Radio Centro assumes no obligation to update such statements.
IR Contacts
In Mexico: In NY:
Pedro Beltran / Alfredo Azpeitia Maria Barona / Peter Majeski
Grupo Radio Centro, S.A.B. de C.V. i-advize Corporate Communications, Inc.
Tel: (5255) 5728-4800 Ext. 4910 Tel: (212) 406-3690
aazpeitia@grc.com.mx grc@i-advize.com.mx
GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED UNAUDITED BALANCE SHEETS
as of June 30, 2011 and 2010
(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars
("U.S. $") (1)
June 30,
--------
2011 2010
U.S. $(1) Ps. Ps.
--------- --- ---
ASSETS
------
Current assets:
Cash and temporary investments 10,507 124,397 33,689
------ ------- ------
Accounts receivable:
Broadcasting, net 25,571 302,733 226,558
Other 634 7,504 8,414
26,205 310,237 234,972
Prepaid expenses 2,383 28,209 89,004
----- ------ ------
Total current assets 39,095 462,843 357,665
Property and equipment, net 36,426 431,246 447,326
Deferred charges, net 366 4,330 2,465
Excess of cost over book value of net
assets of subsidiaries, net 70,012 828,863 828,863
Other assets 288 3,416 3,338
--- ----- -----
Total assets 146,187 1,730,698 1,639,657
======= ========= =========
LIABILITIES
-----------
Current:
Notes payable 3,452 40,871 71,386
Advances from customers 10,352 122,562 72,101
Suppliers and other accounts payable 5,758 68,164 67,627
Taxes payable 4,996 59,149 27,577
Total current liabilities 24,558 290,746 238,691
Long-Term:
Notes payable 5,913 70,000 110,000
Reserve for labor liabilities 5,164 61,136 68,178
Deferred taxes 1,711 20,258 14,784
----- ------ ------
Total liabilities 37,346 442,140 431,653
------ ------- -------
SHAREHOLDERS' EQUITY
--------------------
Capital stock 89,532 1,059,962 1,059,962
Cumulative earnings 5,530 65,469 (15,076)
Reserve for repurchase of shares 2,533 29,989 29,989
Effect from Initial Adoption of IFRS 11,219 132,821 132,821
------ ------- -------
Controlling Interest 108,814 1,288,241 1,207,696
Non-controlling Interest 27 317 308
--- --- ---
Total shareholders' equity 108,841 1,288,558 1,208,004
------- --------- ---------
Total liabilities and Shareholders'
equity 146,187 1,730,698 1,639,657
======= ========= =========
(1) Peso amounts have been translated into U.S. dollars, solely for
the convenience of the reader, at the rate of Ps. 11.8389 per U.S.
dollar, the rate on June 30, 2011.
GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED UNAUDITED STATEMENTS OF INCOME
for the three-month and six-month periods ended June 30, 2011 and 2010
(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars
("U.S. $")(1), except per Share and per ADS amounts)
2nd Quarter
-----------
2011 2010
U.S.$ (1) Ps. Ps.
--------- --- ---
Broadcasting revenue (2) 19,464 230,431 208,589
Broadcasting expenses, excluding
depreciation, amortization and corporate,
general and administrative expenses 14,152 167,542 167,245
Broadcasting income 5,312 62,889 41,344
Depreciation and amortization 471 5,577 6,145
Corporate, general and administrative
expenses 319 3,779 3,779
--- ----- -----
Operating income 4,522 53,533 31,420
Other expenses, net (1,367) (16,183) (13,010)
Comprehensive financing cost:
Interest expense (480) (5,680) (5,592)
Interest income (2) 3 41 537
(Loss) on foreign currency exchange, net 1 15 (425)
(476) (5,624) (5,480)
---- ------ ------
Income (loss) before income taxes 2,679 31,726 12,930
Income taxes 1,296 15,339 9,809
----- ------ -----
Net income (loss) 1,383 16,387 3,121
Net income (loss) applicable to:
Majority interest 1,383 16,386 3,119
Minority interest 0 1 2
---
1,383 16,387 3,121
===== ====== =====
Net income per Series A Share (3)
Net income per ADS (3)
Weighted average common shares outstanding
(000's) (3)
Accumulated 6 months
--------------------
2011 2010
U.S.$ (1) Ps. Ps.
--------- --- ---
Broadcasting revenue (2) 35,408 419,197 374,870
Broadcasting expenses, excluding
depreciation, amortization and corporate,
general and administrative expenses 28,567 338,198 328,028
Broadcasting income 6,841 80,999 46,842
Depreciation and amortization 945 11,188 12,289
Corporate, general and administrative
expenses 638 7,557 7,557
--- ----- -----
Operating income 5,258 62,254 26,996
Other expenses, net (2,636) (31,203) (26,465)
Comprehensive financing cost:
Interest expense (876) (10,371) (13,212)
Interest income (2) 0 2 546
(Loss) on foreign currency exchange, net (1) (15) (174)
(877) (10,384) (12,840)
---- ------- -------
Income (loss) before income taxes 1,745 20,667 (12,309)
Income taxes 1,822 21,576 12,167
----- ------ ------
Net income (loss) (77) (909) (24,476)
Net income (loss) applicable to:
Majority interest (77) (912) (24,481)
Minority interest 0 3 5
(77) (909) (24,476)
=== ==== =======
Net income per Series A Share (3) 0.044 0.5160 0.1735
Net income per ADS (3) 0.392 4.6440 1.5615
Weighted average common shares outstanding
(000's) (3) 162,725 162,725
(1) Peso amounts have been translated into U.S. dollars, solely for
the convenience of the reader, at the rate of Ps. 11.8389 per U.S.
dollar, the rate on June 30, 2011.
(2) Broadcasting revenue for a particular period includes (as a
reclassification of interest income) interest earned on funds
received by the Company pursuant to advance sales of commercial air
time to the extent that the underlying funds were earned by the
Company during the period in question. Advances from advertisers
are recognized as broadcasting revenue only when the corresponding
commercial air time has been transmitted. Interest earned and
treated as broadcasting revenue for the second quarter of 2011 and
2010 was Ps. 562,000 and Ps. 1,422,000, respectively. Interest
earned and treated as broadcasting revenue for the six months ended
June 30, 2011 and 2010 was Ps. 1,023,000 and Ps. 2,342,000,
respectively.
(3) Earnings per share calculations are made for the last twelve
months as of the date of the income statement, as required by the
Mexican Stock Exchange.
SOURCE Grupo Radio Centro S.A.B de C.V.
