CME risks debt crisis
October 30, 2013
Central European Media Enterprises (CME), has returned an “unacceptable” Q3 performance as its revenues dropped and it reported an operating loss of $45 million.
The weak results could mean a debt crisis for the firm: “we will be unable to meet our debt service obligations and generally fund our operations sometime within the next twelve months” Michael Del Nin, co-CEO warned, unless they can find additional financing. Co-CEO Christoph Mainusch said was concentrating on “improving the monetisation of our audiences” and that improving the performance of its Czech operations is “the top priority.”
The co-CEOs took charge of CME following the departure of former CEO Adrian Sarbu in August.
Though CME’s net loss for the three months ended September 30th 2013 was better than in Q3 2012, coming in at a loss of $23.3 million compared to a loss of $32.6 last year, revenues dipped to $135.8 million – down year-on-year from $140.1 million.
The firm’s operating loss of $45.0 million was also worse than its $18.4 million loss last year.
CME cited increased content costs as well as $6.4 million of severance costs, as weighing on results.
CME revised down its full-year outlook to reflect “lower expectations for our operations in the Czech Republic and the Slovak Republic.” The results top a difficult few months for CME, which has seen the departure of a number of top executives since Sarbu’s exit – including CFO David Sach, executive VP, strategic planning and operations Anthony Chhoy and the general director of CME’s Czech commercial TV station TV Nova, Jan Andrusko.