GRUPO RADIO CENTRO SAB DE CV 
By MEXICO CITY, July 17, 2012 /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, 2012. 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 2012 totaled Ps. 235,834,000, a 2.3% increase compared to the Ps. 230,431,000 reported for the second quarter of 2011. This slight increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico, who purchased more airtime during the second quarter of 2012 compared to the same period of 2011.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate expenses) for the second quarter of 2012 totaled Ps. 177,973,000, a 6.2% increase compared to the Ps. 167,542,000 reported for the second quarter of 2011. This increase was mainly due to (i) higher commissions paid to the Company's sales force and to advertising agencies due to the increase in broadcasting revenue and (ii) higher expenses related to the radio station in Los Angeles, KXOS-FM.
The Company's depreciation and amortization expenses for the second quarter of 2012 totaled Ps. 5,183,000, a 7.1% decrease compared to the Ps. 5,577,000 reported for the second quarter of 2011. This decrease was attributable to a reduction in the amount of depreciable assets.
The Company's corporate expenses for the second quarter of 2012 totaled Ps. 3,779,000, the same amount reported for the second quarter of 2011.
The Company's operating income for the second quarter of 2012 totaled Ps. 48,899,000, an 8.7% decrease compared to the Ps. 53,533,000 reported for the second quarter of 2011. This decrease was mainly due to the increase in broadcasting expenses described above.
The Company's other expenses, net for the second quarter of 2012 totaled Ps. 29,336,000, an 81.3% increase compared to the Ps. 16,183,000 reported for the second quarter of 2011. This increase was mainly attributable to legal expenses incurred during the second quarter of 2012.
The Company's finance costs for the second quarter of 2012 totaled Ps. 3,270,000, a 41.9% decrease compared to the Ps. 5,624,000 reported for the second quarter of 2011. This decrease was mainly attributable to a reduction in the interest expense paid under the Company's loan with Banco Inbursa, S.A. as a result of the payment by the Company of a portion of the principal thereon.
The Company's profit before income taxes for the second quarter of 2012 totaled Ps. 16,293,000, a 48.6% decrease compared to the Ps. 31,726,000 reported for the same period of 2011.
The Company's income tax totaled Ps. 6,768,000 as a negative provision for the second quarter of 2012, a significant decrease compared to the Ps. 15,339,000 recorded in the second quarter of 2011. This decrease was mainly due to certain tax benefits obtained.
As a result of the foregoing, the Company's profit in the second quarter of 2012 totaled Ps. 23,061,000, a 40.7% increase compared to the profit of Ps. 16,387,000 recorded for the second quarter of 2011.
First Half Results
The Company's broadcasting revenue for the six months ended June 30, 2012 totaled Ps. 477,546,000, a 13.9% increase compared to the Ps. 419,197,000 reported for the same period of 2011. This increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico, who purchased more airtime during the first half of 2012 compared to the same period of 2011.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate expenses) for the first six months of 2012 totaled Ps. 358,818,000, a 6.1% increase compared to the Ps. 338,198,000 reported for the same period of 2011. This increase was primarily due to (i) higher commissions paid to the Company's sales force and to advertising agencies due to the increase in broadcasting revenue, (ii) higher expenses related to the Los Angeles radio station, KXOS-FM and (iii) an increase in production costs for talk shows programs.
The Company's depreciation and amortization expenses for the first six months of 2012 totaled Ps. 10,451,000, a 6.6% decrease compared to the Ps. 11,188,000 reported for the same period of 2011. This decrease was due to a reduction in the amount of depreciable assets in the first half of 2012 compared to the same period of 2011.
The Company's corporate expenses for the first six months of 2012 totaled Ps. 7,557,000, the same amount reported for the same period of 2011.
The Company's operating income for the first six months of 2012 totaled Ps. 100,720,000, a 61.8% increase compared to the Ps. 62,254,000 reported for the same period of 2011.
The Company's other expenses, net for the first six months of 2012 totaled Ps. 43,705,000, a 40.1% increase compared to the Ps. 31,203,000 reported for the same period of 2011. This increase was mainly attributable to legal expenses in the first half of 2012 compared to the same period of 2011.
The Company's finance costs for the first six months of 2012 totaled Ps. 7,173,000, a decrease of 30.9% compared to the Ps. 10,384,000 reported for the same period of 2011. This decrease was mainly attributable to a reduction in the interest expense paid under the Company's loan with Banco Inbursa, S.A. as a result of the payment by the Company of a portion of the principal thereon.
The Company's profit before income tax for the first six months of 2012 totaled Ps. 49,842,000, a 141.2% increase compared to the profit before income tax of Ps. 20,667,000 reported for the same period of 2011. This increase was mainly due to the aforementioned increase in broadcasting revenue.
For the first six months of 2012, the Company's income tax totaled Ps. 2,518,000 as a negative provision, a significant decrease compared to the income tax of Ps. 21,576,000 recorded for the same period of 2011. This decrease was mainly the result of certain tax benefits obtained.
As a result of the foregoing, the Company's profit in the first six months of 2012 totaled Ps. 52,360,000, compared to a net loss of Ps. 909,000 for the same period of 2011.
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 127 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
i-advize Corporate Communications,
Grupo Radio Centro, S.A.B. de C.V. 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, 2012 and 2011
(figures in thousands of Mexican pesos ("Ps.") and U.S.
dollars ("U.S. $") (1)
-------------------------------------------------------
June 30,
--------
2012 2011
U.S. $(1) Ps. Ps.
--------- --- ---
ASSETS
------
Current assets:
Cash and cash
equivalents 5,447 74,373 124,397
----- ------ -------
Accounts receivable:
Broadcasting
receivables -Net 19,975 272,714 302,733
Other receivables 980 13,382 7,504
--- ------ -----
20,955 286,096 310,237
Prepaid expenses 4,039 55,150 28,209
Deferred taxes 288 3,934 0
--- ----- ---
Total current assets 30,729 419,553 462,843
Property and equipment 35,579 485,761 431,246
Deferred charges, net 200 2,725 4,330
Goodwill 60,709 828,863 828,863
Other assets 268 3,653 3,416
--- ----- -----
Total assets 127,485 1,740,555 1,730,698
======= ========= =========
LIABILITIES
-----------
Current liabilities:
Current portion of
long-term debt 2,970 40,554 40,871
Deferred revenue 2,106 28,757 122,562
Accounts payable and
accrued expenses 4,753 64,895 68,164
Taxes payable 2,698 36,838 59,149
----- ------ ------
Total current
liabilities 12,527 171,044 290,746
Non-current
liabilities:
Long-term debt 2,197 30,000 70,000
Employee benefits 5,748 78,472 61,136
Deferred taxes 0 0 20,258
--- --- ------
Total liabilities 20,472 279,516 442,140
------ ------- -------
STOCKHOLDERS' EQUITY
--------------------
Common stock 77,636 1,059,962 1,059,962
Retained earnings 26,828 366,285 196,185
Reserve for repurchase
of shares 2,197 29,989 29,989
Other comprehensive
income 336 4,590 2,105
--- ----- -----
Equity attributable to
owners of the Company 106,997 1,460,826 1,288,241
Non-controlling
Interest 16 213 317
--- --- ---
Total equity 107,013 1,461,039 1,288,558
------- --------- ---------
Total liabilities and
Stockholders' equity 127,485 1,740,555 1,730,698
======= ========= =========
(1) Peso amounts have been translated into U.S. dollars,
solely for the convenience of the reader, at the rate of
Ps.13.653 per U.S. dollar, the rate on June 30, 2012
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, 2012 and 2011
(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars ("U.S. $")(1), except per Share and per ADS
amounts)
-----------------------------------------------------------------------------------------------------------
2nd Quarter Accumulated 6 months
----------- --------------------
2012 2011 2012 2011
U.S.$ (1) Ps. Ps. U.S.$ (1) Ps. Ps.
--------- --- --- --------- --- ---
Broadcasting revenue (2) 17,273 235,834 230,431 34,977 477,546 419,197
Broadcasting expenses, excluding
depreciation,
amortization and corporate
expenses 13,035 177,973 167,542 26,281 358,818 338,198
------ ------- ------- ------ ------- -------
Depreciation and amortization 380 5,183 5,577 765 10,451 11,188
Corporate expenses 277 3,779 3,779 554 7,557 7,557
--- ----- ----- --- ----- -----
Operating income 3,581 48,899 53,533 7,377 100,720 62,254
----- ------ ------ ----- ------- ------
Other expenses, net (2,149) (29,336) (16,183) (3,201) (43,705) (31,203)
Finance costs:
Interest expense (246) (3,357) (5,680) (511) (6,977) (10,371)
Interest income (2) 7 92 41 9 125 2
Income (loss) on foreign
currency exchange, net 0 (5) 15 (24) (321) (15)
--- --- --- --- ---- ---
Net finance costs (239) (3,270) (5,624) (526) (7,173) (10,384)
---- ------ ------ ---- ------ -------
Profit before income taxes 1,193 16,293 31,726 3,650 49,842 20,667
Income tax expense (496) (6,768) 15,339 (184) (2,518) 21,576
---- ------ ------ ---- ------ ------
Profit (loss) for the period 1,689 23,061 16,387 3,834 52,360 (909)
Profit (loss) applicable to:
Majority interest 1,689 23,064 16,386 3,834 52,360 (912)
Minority interest 0 (3) 1 0 0 3
--- --- --- --- --- ---
1,689 23,061 16,387 3,834 52,360 (909)
===== ====== ====== ===== ====== ====
Net income (loss) per Series A Share (3) 0.103 1.4058 0.5160
Net income (loss) per ADS (3) 0.927 12.6522 4.6440
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. 13.653 per U.S. dollar, the rate on June 30, 2012
(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 2012 and 2011 was Ps. 1,224,000
and Ps. 562,000, respectively. Interest earned and treated as broadcasting revenue for the six months ended
June 30, 2012 and 2011 was Ps. 2,338,000 and Ps. 1,023,000, 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.
