February 25, 2011
TV broadcasting in Russia has had a hard time, badly hurt by the advertising recession. One benchmark broadcaster is CTC Media which has had a roller-coaster ride this past two years. That position is changing – and fast. Bankers Morgan Stanley say Russia will enjoy one of the fastest advertising growth rates on the planet. CTC Media operate commercial TV stations in Russia, including CTC Network, DTV and Domashny.
The past year had already seen the ad-market recover somewhat, and saw CTC enjoy a 10% growth in advertising revenues (albeit from a very low base). But now investment bankers Morgan Stanley is forecasting an 18% rise for this financial year, and has re-rated CTC Media from ‘equal weight’ to ‘overweight’.
In a note to investors from Morgan Stanley says “CTC has an excellent position in the Russian advertising market that we expect to be one of the fastest growing globally. Having increased its [market] share from 56% in 2008 to 60% in 2010, we forecast 15% CAGR 2010-12 vs 10% in CEE, 4% in W. Europe, 8% in Asia Pacific and 11% in Latin America. 95% of CTC’s revenues derive from advertising, which grew 50% above GDP in 2002-08. We forecast 18% nominal price driven growth in 2011 relative to 13% forecast consumption growth.”