GCLA.L Regulatory News (GCLA)

RNS Number : 8891Q

Grupo Clarin S.A.

11 August 2010

 

 

 

 

Grupo Clarín announces its

Results for the First Half (1H10) and Second Quarter of 2010 (2Q10)

 

 

 

 

Buenos Aires, Argentina, August 11th, 2010 - Grupo Clarín S.A. ("Grupo Clarín" or the "Company" - LSE: GCLA; BCBA: GCLA), the largest media company in Argentina, announced today its first half and second quarter results for 2010. Figures in this report have been prepared in accordance with Argentine GAAP as of June 30th, 2010 and are stated in Argentine Pesos, unless otherwise indicated.

 

Highlights (1H10 vs. 1H09):

 

§ Net Sales totaled Ps. 3,516.1 million, an increase of 9.0% from 1H09, mainly due to ARPU and subscriber growth in the Cable TV and Internet access segment and, to a lesser extent, higher sales in the Printing and Publishing segment, and partially offset by lower revenues in the Broadcasting and Programming segment.

§ Adjusted EBITDA (1) reached Ps. 1,153.0 million, an increase of 19.7% from 1H09, mainly driven by higher sales in the Cable and Internet access segment.

§ Grupo Clarín's Adjusted EBITDA Margin(2) for 1H10 was 32.8%, compared to 29.8% in 1H09.

§ Net Income totaled Ps. 247.1 million, compared to Ps. 90.9 million reported in 1H09.

 

 

FINANCIAL HIGHLIGHTS

(In millions of Ps.)	1H10	1H09	YoY	2Q10	1Q10	2Q09	QoQ	YoY
Net Sales	3,516.1	3,227.2	9.0%	1,872.8	1,643.3	1,717.4	14.0%	9.1%
Adjusted EBITDA (1)	1,153.0	963.0	19.7%	623.2	529.8	527.3	17.6%	18.2%
Adjusted EBITDA Margin (2)	32.8%	29.8%	9.9%	33.3%	32.2%	30.7%	3.2%	8.4%
Net Income	247.1	90.9	172%	153.0	94.1	125.7	62.6%	21.7%

 

 

(1) We define Adjusted EBITDA as net sales minus cost of sales (excluding depreciation and amortization) and selling and administrative expenses (excluding depreciation and amortization). We believe that Adjusted EBITDA is a meaningful measure of our performance. It is commonly used to analyze and compare media companies on the basis of operating performance, leverage and liquidity. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating activities or a measure of liquidity. Because Adjusted EBITDA is not an Argentine GAAP measure, other companies may compute Adjusted EBITDA in a different manner. Therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it.

(2) We define Adjusted EBITDA Margin as Adjusted EBITDA over Net Sales.

 

 

Net sales reached Ps.3,516.1 million, an increase of9.0% from Ps.3,227.2 million in 1H09 mainly due to ARPU and subscriber growth in the Cable TV and Internet access segment, higher sales in the Printing and Publishing segment and partially offset by lower revenues in the Broadcasting and Programming segment.

 

Following is a breakdown of Net Sales by business segment:

 

NET SALES

 

(In millions of Ps.)	1H10	1H09	YoY	2Q10	1Q10	2Q09	QoQ	YoY
Cable TV and Internet Access	2,280.2	2,055.4	10.9%	1,168.3	1,111.9	1,059.9	5.1%	10.2%
Printing and Publishing	848.7	750.3	13.1%	457.3	391.5	394.2	16.8%	16.0%
Broadcasting and Programming	473.1	559.8	(15.5%)	290.5	182.6	334.8	59.1%	(13.2%)
Digital Content and Others	108.8	86.3	26.1%	55.7	53.1	43.1	5.0%	29.4%
Subtotal	3,710.8	3,451.9	7.5%	1,971.8	1,739.0	1,832.0	13.4%	7.6%
Eliminations	(194.7)	(224.7)	(13.3%)	(99.0)	(95.7)	(114.7)	3.5%	(13.6%)
Total	3,516.1	3,227.2	9.0%	1,872.8	1,643.3	1,717.4	14.0%	9.1%

 

Cost of sales (Excluding Depreciation and Amortization) reached Ps. 1,635.5 million, an increase of 2.1% from Ps. 1,602.5 million reported for 1H09 due to higher costs in our business segments, mainly in Printing and Publishing and Digital Contents and others, partially offset by lower costs in the Cable TV and Internet access and Broadcasting and Programming segments.

 

Selling and Administrative Expenses (Excluding Depreciation and Amortization) reached Ps. 727.6 million, an increase of 9.9% from Ps. 661.7 million in 1H09. This increase was mainly due to higher costs in the Cable and Internet access, Printing and Publishing and Digital Contents and others segments.

 

Adjusted EBITDA reached Ps.1,153.0 million, an increase of 19.7% from Ps. 963.0 million reported for1H09, driven by higher sales in the Cable and Internet access and Printing and Publishing segments, and mainly due to margin expansion in the Cable and Internet access segment.

 

Following is a breakdown of adjusted EBITDA by business segment:

 

ADJUSTED EBITDA

(In millions of Ps.)	1H10	1H09	YoY	2Q10	1Q10	2Q09	QoQ	YoY
Cable TV and Internet access	917.6	704.2	30.3%	460.3	457.2	356.9	0.7%	29.0%
Printing and Publishing	158.2	136.7	15.7%	99.7	58.5	77.7	70.3%	28.4%
Broadcasting and Programming	73.1	116.1	(37.0%)	60.4	12.7	90.5	375.4%	(33.3%)
Digital Content and Others	4.2	5.9	(29.8%)	2.8	1.3	2.1	112.6%	32.1%
Subtotal	1,153.0	963.0	19.7%	623.2	529.8	527.3	17.6%	18.2%
Eliminations	-	-	NA	-	-	-	NA	NA
Total	1,153.0	963.0	19.7%	623.2	529.8	527.3	17.6%	18.2%

 

Financial results nettotaled Ps.(240.9) million compared to Ps. (426.4) million for 1H09. The decrease was mainly due to lower financial debt and peso depreciation, which went from 3.80 pesos per dollar at the end of 2009, to 3.93 pesos per dollar as of June 30th, 2010.

 

Equity in earnings from unconsolidated affiliates in 1H10 totaled Ps. 2.4 million, compared to Ps. 4.9 million for 1H09.

 

Other expenses, net reached Ps. 0.5 million, compared to Ps. (0.5) million in 1H09.

 

Income tax as of June 2010 reached Ps. (232.8) million, from Ps. (102.3) million in June 2009.

 

Net income totaled Ps.247.1 million, compared with Ps. 90.9 million reported for 1H09. This was mainlya consequence of higher EBITDA in the Cable and Internet access and Printing and Publishing segments, and partially offset by the peso depreciation.

 

Cash used in acquisitions of property, plant and equipment (CAPEX) totaled Ps. 503.2 million in1H10, an increase of38.5% from Ps.363.3 million reported for 1H09. Out of the total CAPEX in 1H10, 90.8% was allocated to the Cable TV and Internet access segment, 4.8% to the Printing and Publishing segment and the remaining 4.4% to other activities. Our Capex in the Cable TV and Internet access segment contemplates subscriber growth, network upgrades, digitalization and further development of the triple play strategy. 

 

Debt profile (1): Debt coverage ratio for the period ended June 30th, 2010 was 1.2x while Net Debt at the end of this period totaled Ps. 2,191.1 million.

 

(1) Debt Coverage Ratio is defined as Total Financial Debt divided by Adjusted EBITDA (last 12 months). Total Financial debt is defined as financial loans and debt for acquisitions, including accrued interest. The Net Debt does not include cash in reserve accounts in Cablevisión S.A.

 

 

SALES BREAKDOWN BY SOURCE OF REVENUE - JUNE 2010

 

(In millions of Ps.)	Cable TV & Internet access	Printing & Publishing	Broadcasting & Programming	Digital Content & Others	Eliminations	Total	%
Advertising	22.2	455.1	275.1	18.9	(49.1)	722.3	20.5%
Circulation	-	261.8	-	-	(0.0)	261.8	7.4%
Printing	-	84.7	-	-	(15.4)	69.3	2.0%
Video Subscriptions	1,702.7	-	-	-	-	1,702.7	48.4%
Internet Subscriptions	480.3	-	-	-	(0.7)	479.5	13.6%
Programming	-	-	155.6	-	(50.9)	104.7	3.0%
Other Sales	74.9	47.1	42.4	89.9	(78.6)	175.7	5.0%
Total Sales	2,280.2	848.7	473.1	108.8	(194.7)	3,516.1	100.0%

 

 

SALES BREAKDOWN BY SOURCE OF REVENUE - JUNE 2009

 

(In millions of Ps.)	Cable TV & Internet access	Printing & Publishing	Broadcasting & Programming	Digital Content & Others	Eliminations	Total	%
Advertising	23.4	392.1	269.8	11.9	(37.1)	660.2	20.5%
Circulation	-	232.0	-	-	-	232.0	7.2%
Printing	-	61.9	-	-	(14.0)	47.9	1.5%
Video Subscriptions	1,596.5	-	-	-	-	1,596.5	49.5%
Internet Subscriptions	379.8	-	-	-	(1.0)	378.9	11.7%
Programming	-	-	236.2	-	(101.4)	134.8	4.2%
Other Sales	55.7	64.3	53.9	74.4	(71.3)	177.0	5.5%
Total Sales	2,055.4	750.3	559.8	86.3	(224.7)	3,227.2	100.0%

 

 

 

 

CABLE TV AND INTERNET ACCESS

 

Net Sales

Net sales increased by 10.9% to Ps. 2,280.2 million for 1H10compared to Ps. 2,055.4 million for 1H09. The increase is mostly attributable to an increase in subscription charges registered during the last twelve months, and also reflects the growth in Cable, Broadband and Digital subscribers. The company has discontinued the consolidation of 99.6 thousand subscribers since October 1st, 2009. Therefore, Total Consolidated Cable TV Basic Subscribers reached 3,312,181 as of June 2010, compared to the 3,249,600 reported for the same date in 2009. Internet subscribers reached 1,055,801 in June 2010, compared to the 948,300 of June 2009.

 

 

 

Cost of Sales(Excluding Depreciation and Amortization)

Cost of sales (excluding depreciation and amortization) decreased by 3.6% to Ps. 907.8 million for June 2010, compared to Ps. 941.3 million in June 2009. This was mainly due to lower programming costs associated to the unilateral rescission of the football contract with the AFA for the premier league matches, now being aired on broadcast TV, and also due to renegotiations with programming suppliers, partially offset by an increase in salaries and network expenses.

 

Selling and Administrative Expenses (Excluding Depreciation and Amortization)

Selling and administrative expenses (excluding depreciation and amortization) increased by 11.0% to Ps. 454.8 million for 1H10, compared to Ps. 409.9 million reported in 1H09. This increase is driven by higher fees for services, marketing expenses, salaries, duties and contributions and commissions. 

 

Depreciation and Amortization

Depreciation and amortization expenses increased by 0.8% to Ps. 242.2 million for 1H10 from Ps. 240.4 million reported in 1H09.

 

 

PRINTING AND PUBLISHING

 

Net Sales

Net sales increased by 13.1% to Ps.848.7 million in 1H10, compared to Ps. 750.3 million in 1H09. This was the result of higher sales in advertising, circulation, printing services and CIMECO.

 

Cost of Sales(Excluding Depreciation and Amortization)

Cost of sales (excluding depreciation and amortization) increased by 9.6% to Ps. 448.4 million in 1H10, compared to Ps. 409.2 million in 1H09. The increase was mainly the result of higher salaries and social security expenses and higher printing costs.

 

Selling and Administrative Expenses (Excluding Depreciation and Amortization)

Selling and administrative expenses (excluding depreciation and amortization) increased by 18.5% to Ps. 242.1 million in 1H10, compared to the Ps. 204.3 million reported for 1H09. This was primarily the result of higher salaries, fees and marketing expenses, partially offset by the result of Ps. 7.5 million due to a reversal of allowances for doubtful accounts related to advertising.

 

Depreciation and Amortization

Depreciation and amortization expenses increased by 3.9% to Ps. 32.2 million in 1H10 compared to Ps. 31.0 million in 1H09.

 

We have discontinued the proportional consolidation of the 49% stake in Papel Prensa from April 1st, 2010.

 

BROADCASTING AND PROGRAMMING

 

Net Sales

Net sales decreased by 15.5% to Ps. 473.1 million in 1H10, compared to Ps. 559.8 million in 1H09. The decrease was primarily the result of lower sports programming sales due to the unilateral contract rescission by AFA, and was partially offset by higher sales at Canal Trece and in our racing car business.

 

Cost of Sales(Excluding Depreciation and Amortization)

Cost of sales (excluding depreciation and amortization) decreased by 8.0% to Ps. 316.5 million in 1H10, compared to Ps. 343.8 million in 1H09. This is attributable to lower sports programming production due to the unilateral contract rescission by AFA and lower co-production and events costs, partially offset mainly by increases in salaries.

 

Selling and Administrative Expenses (Excluding Depreciation and Amortization)

Selling and administrative expenses (excluding depreciation and amortization) decreased by16.4% to Ps.83.6 million in 1H10, compared to Ps. 99.9 million in 1H09. The decrease was primarily the result of Ps. 20.9 million due to a reversal of allowances for doubtful accounts related to advertising and partially offset by salary increases.

 

Depreciation and Amortization

Depreciation and amortization expenses decreased by 24.1% to Ps. 17.9 million in 1H10 compared to Ps.  23.6 million reported in 1H09.

 

DIGITAL CONTENT AND OTHERS

 

Net sales in this segment are derived from administrative and corporate services rendered by the Company and by our subsidiary GC Gestión Compartida S.A. to third parties as well as to other subsidiaries of the Company (which are eliminated in the consolidation). Additionally, this segment includes the production of digital content. Net sales to third parties are largely derived from advertising in our web pages and portals. Cost of sales (excluding depreciation and amortization) is driven mainly by salaries and professional fees paid to advisers. 

 

In this period, net sales increased 26.1% to Ps. 108.8 million from Ps. 86.3 million reported in 1H09, due to higher sales in digital content and Gestión Compartida. EBITDA resulted in Ps. 4.2 million.

 

OPERATING STATISTICS BY BUSINESS SEGMENT

 

CABLE TV AND INTERNET ACCESS

	1H10	1H09	YoY		2Q10	1Q10	2Q09	QoQ	YoY
Homes Passed (1)	7,453.6	7,242.6	2.9%		7,453.6	7,445.8	7,242.6	0.1%	2.9%
Bidirectional Homes Passed	56.8%	54.5%	4.2%		56.8%	56.5%	54.5%	0.5%	4.2%
Cable TV
Total Consolidated Subscribers (1)(3)	3,312.2	3,249.6	1.9%		3,312.2	3,227.8	3,249.6	2.6%	1.9%
Subscribers - Argentina	3,108.8	3,061.0	1.6%		3,108.8	3,032.6	3,061.0	2.5%	1.6%
Subscribers - International	203.3	188.7	7.8%		203.3	195.2	188.7	4.2%	7.8%
Uruguay	101.0	93.1	8.5%		101.0	95.5	93.1	5.7%	8.5%
Paraguay	102.3	95.6	7.0%		102.3	99.7	95.6	2.7%	7.0%
% over Homes Passed	56.8%	44.9%	26.5%		56.8%	43.4%	44.9%	31.0%	26.5%
Total Equity Subscribers(4)	3,386.0	3,225.9	5.0%		3,386.0	3,298.6	3,225.9	2.6%	5.0%
Churn Rate %	13.7%	16.5%	(16.9%)		13.4%	13.9%	16.0%	(3.2%)	(16.2%)
Digital Video
Digital Ready Pay TV Subs	2,201.4	2,096.1	5.0%		2,201.4	2,143.7	2,096.1	2.7%	5.0%
Total Digital Decoders	602.9	471.9	27.8%		602.9	499.1	471.9	20.8%	27.8%
Argentina	505.4	398.6	26.8%		505.4	413.9	398.6	22.1%	26.8%
International	97.4	73.3	32.9%		97.4	85.2	73.3	14.4%	32.9%
Penetration over Digital Ready TV Subs	27.4%	22.5%	21.7%		27.4%	23.3%	22.5%	17.6%	21.7%
Internet Subscribers
Total Internet Subscribers (1)	1,055.8	948.3	11.3%		1,055.8	1,011.6	948.3	4.4%	11.3%
Cablemodem(1)	1,026.1	908.3	13.0%		1,026.1	979.2	908.3	4.8%	13.0%
ADSL(1)	19.3	26.7	(27.7%)		19.3	21.3	26.7	(9.2%)	(27.7%)
Dial Up (1)	10.4	13.2	(21.3%)		10.4	11.2	13.2	(7.0%)	(21.3%)
% over Bidirectional Homes Passed	24.9%	24.0%	3.9%		24.9%	24.0%	24.0%	3.8%	3.9%
Total ARPU(2)	116.8	106.4	9.8%		119.1	115.4	109.3	3.2%	9.0%

 

(1) Figures in thousands

(2) Net Sales/ Average Pay TV Subscribers

(3) Total subscribers consolidated following the same consolidation methods used in the financial statements as of each year end.

(4) Total subscribers considering the equity share in each subsidiary.

 

 

PRINTING AND PUBLISHING

	1H10	1H09	YoY	2Q10	1Q10	2Q09	QoQ	YoY
Circulation (1)	372.3	400.8	(7.1%)	366.8	379.2	392.5	(3.3%)	(6.5%)
Circulation share % (2)	43.9%	47.1%	(6.8%)	42.9%	44.9%	47.4%	(4.4%)	(9.4%)
Advertising share %(3)	54.8%	56.8%	(3.5%)	54.9%	54.5%	57.5%	0.7%	(4.5%)

 

(1) Average number of copies according to IVC (including Diario Clarín and Olé)

(2) Share in Buenos Aires and Greater Buenos Aires Area (AMBA) Diario Clarín. Source: AGEA and IVC.

(3) Share in Buenos Aires and Greater Buenos Aires Area (AMBA) Diario Clarín. Source: Monitor de Medios Publicitarios S.A.

 

 

BROADCASTING AND PROGRAMMING

 

	1H10	1H09	YoY	2Q10	1Q10	2Q09	QoQ	YoY
Advertising share %(1)	36.5%	35.0%	4.5%	36.2%	37.2%	34.1%	(2.9%)	6.2%
Audience share % (2)
Prime Time	38.1%	39.4%	(3.3%)	38.0%	38.3%	41.5%	(0.9%)	(8.4%)
Total Time	28.0%	30.2%	(7.3%)	27.1%	28.8%	30.9%	(5.7%)	(12.1%) (12.1%)

 

 

(1) Company estimate, over ad spend in Ps. in broadcast TV for AMBA region.

 (2) Share of broadcast TV audience according to IBOPE for AMBA. Prime Time is defined as Monday through Friday from 8pm to 12am. Total Time is defined as Monday through Sunday from 12pm to 12am.

 

 

DIGITAL CONTENT AND OTHERS

	1H10	1H09	YoY
Page Views (1)	527.7	487.0	8.4%
Unique Visitors(1)	20.2	16.3	23.5%

 

(1)In millions. Average. Source IAB

 

DEBT AND LIQUIDITY

(In millions of Ps.)	June 10	June 09	% Change	March 10	% Change
Short Term and Long Term Debt
Current Financial Debt	362.6	379.0	(4.3%)	369.7	(1.9%)
Financial loans	52.8	149.1	(64.6%)	32.1	64.7%
Negotiable obligations	238.2	136.2	74.9%	224.5	6.1%
Accrued interest	31.5	31.1	1.2%	68.6	(54.1%)
Acquisition of equipment	27.6	13.8	100.1%	31.7	(12.9%)
Sellers Financing Capital	4.0	28.3	(85.9%)	4.3	(6.3%)
Sellers Financing accrued interest	1.7	7.8	(78.7%)	0.02	NA
Related Parties Capital	-	-	NA	-	NA
Related Parties accrued interest	-	-	NA	0.4	(100.0%)
Bank overdraft	6.9	12.7	(45.8%)	8.1	(14.7%)
Non-Current Financial Debt	2,250.9	2,650.0	(15.1%)	2,309.7	(2.5%)
Financial loans	109.4	35.5	208.1%	103.9	5.3%
Negotiable obligations	1,982.5	2,127.9	(6.8%)	2,045.8	(3.1%)
Accrued interest	-	1.1	(100.0%)	-	NA
Acquisition of equipment	31.5	35.3	(10.9%)	33.8	(6.9%)
Sellers Financing	119.5	450.2	(73.5%)	118.2	1.1%
Related Parties Capital	8.1	-	NA	8.1	(0.0%)
Total Financial Debt (A)	2,613.5	3,029.0	(13.7%)	2,679.4	(2.5%)
Measurement at fair Value	0.0	(30.7)	(100.1%)	(5.5)	(100.4%)
Total Short Term and Long Term Debt	2,613.5	2,998.3	(12.8%)	2,673.9	(2.3%)
Cash and Cash Equivalents (B)*	422.5	435.7	(3.0%)	544.7	(22.4%)
Net Debt (A) - (B)	2,191.1	2,593.3	(15.5%)	2,134.8	2.6%
Net Debt/Adjusted Ebitda (Last 12 Months)	1.01x	1.4x	(27.3%)	1.03x	(1.9%)
% USD Debt	94.4%	87.2%	8.2%	93.2%	1.3%
% Ar. Ps Debt	5.6%	12.8%	(56.2%)	6.8%	(17.5%)

 

* Does not include Reserve Accounts amounting to 77.2 MM ARS as of June 30th, 2010.

 

Negotiable obligations include Cablevisión USD 100.0 MM notes due October 2012; Cablevisión USD 235.1 MM notes due October 2015, Multicanal USD 100.4 MM notes due July 2013, Multicanal USD 80.3 MM notes due July 2016 and AGEA Ps. 112.5 MM notes due 2011.

 

Total Financial Debt(1) and Net Debt, decreased from Ps. 3,029.0 million to Ps.2,613.5 million and decreased from Ps. 2,593.3 million to Ps. 2,191.1 million. This represents a decrease of 13.7% in the Total Debt and a decreaseof15.5% in the Net Debt.

 

Debt coverage ratio (1) as of June 30th, 2010 was 1.2x in terms of Total Financial Debt and was 1.01x in the case of Net Debt.

 

(1) Total Financial debt is defined as financial loans and debt for acquisitions, including accrued interest. Debt Coverage Ratio is defined as Total Financial Debt divided by Adjusted EBITDA (last 12 months). Net Debt ratio does not include Reserve Accounts amounting to 77.2 MM ARS as of June 30th, 2010.

 

 

 

STOCK AND MARKET INFORMATION

 

Grupo Clarín trades its stock in the Buenos Aires Stock Exchange (BCBA) and in the London Stock Exchange (LSE), in the form of shares and GDS's, respectively.

 

GCLA (BCBA) Price per Share (ARS)	12.70
GCLA (LSE) Price per GDS (USD)	6.80
Total Shares	287,418,584
Total GDSs	143,709,292
Market Value (USD MM)	977.2
Closing Price	August 10th, 2010

 

 

CONFERENCE CALL AND WEBCAST INFORMATION

 

Grupo Clarín will host a conference call and webcast to discuss its Second Quarter Results for 2010, on Wednesday, August 11th, 2010.

 

Presentations by: Alejandro Urricelqui, Chief Financial Officer; Alfredo Marin, Investor Relations Officer

 

Time: 12 pm Buenos Aires Time/4:00 pm London Time/11:00 am New York Time

 

To access the conference call, please dial: from within Argentina + 0 800 333 0050; from within the United Kingdom +44 (800) 092 3582; from within the United States +1 (800) 311 9401; and from all other countries+1 (334) 323 7224. The Conference ID is #6118.

 

To access the simultaneous webcast presentation, please direct your browser to:

http://www.grupoclarin.com/ir

 

There will be a two week replay available starting one hour after the conclusion of the conference call. To access the replay, please dial +1 (877) 919-4059 toll free from the U.S., or +1 (334) 323-7226 from anywhere outside the U.S. The replay passcode is: 72289749

 

The PDF version of the webcast presentation will be available at http://www.grupoclarin.com.ar/ir prior to the call, on August 11th, and archived in our Website after its conclusion.

 

 

INVESTOR RELATIONS CONTACTS

 

In Buenos Aires:

Alfredo Marín/ M. Julia Díaz Ardaya/ Romina Vázquez

Grupo Clarín S.A.

Tel: +54 11 4309 7215

Email: investors@grupoclarin.com

 

In London:

Alex Money/ Lorna Ellen

Temple Bar Advisory

Tel: +44 20 7002 1080

Email: clarin@templebaradvisory.com

 

In New York:

Melanie Carpenter/ Peter Majeski

I-advize Corporate Communications

Tel: +1 212 406 3692

Email: clarin@i-advize.com

 

 

 

ABOUT THE COMPANY

 

Grupo Clarín is the largest media company in Argentina and the market leader in the Cable Television and Internet Access, Printing and Publishing, and Broadcasting and Programming segments. Its Cable Television network is one of the largest in Latin America, with one of the largest broadband subscriber base in Argentina. Its flagship newspaper -Diario Clarín- is the highest circulation newspaper in Latin. Grupo Clarín is the main producer of media content in Argentina, including news, sports and entertainment and reaches substantially all segments of the Argentine population in terms of wealth, geography and age.

 

Disclaimer

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Grupo Clarín. You can identify forward-looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could", "may" or "might" the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. Grupo Clarín does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in Grupo Clarín's projections or forward-looking statements, including, among others, general economic conditions, Grupo Clarín's competitive environment, risks associated with operating in Argentina a, rapid technological and market change, and other factors specifically related to Grupo Clarín and its operations.

CONSOLIDATED BALANCE SHEETS

As of June 30, 2010 and December 31, 2009

In Argentine Pesos (Ps.)

 

	June 30, 2010		December 31, 2009
ASSETS
CURRENT ASSETS
Cash and banks	317,057,383		353,448,122
Short-term investments	105,407,786		105,994,857
Trade receivables, net	867,587,414		807,894,500
Other receivables, net	271,414,326		224,291,008
Inventories	250,959,740		233,796,980
Other assets	90,576,727		66,634,166
Total current assets	1,903,003,376		1,792,059,633
NON-CURRENT ASSETS
Trade receivables, net	1,406,035		7,383,794
Other receivables, net	121,725,150		114,889,697
Inventories	24,444,822		46,722,943
Investment in unconsolidated affiliates	264,320,533		67,598,985
Other investments	1,103,113		1,099,540
Property, plant and equipment, net f	2,638,651,257		2,538,482,919
Intangible assets, net	746,013,163		806,361,141
Other assets	468,357		253,494
Subtotal	3,798,132,430		3,582,792,513
Goodwill	2,711,440,656		2,716,022,085
Total non-current assets	6,509,573,086		6,298,814,598
Total assets	8,412,576,462		8,090,874,231
LIABILITIES
CURRENT LIABILITIES
Accounts payable	803,416,087		668,572,856
Long-term debt	355,825,700		341,535,190
Salaries and Social Security payable	282,266,524		318,166,460
Taxes payable	326,902,188		363,603,538
Sellers financing	5,649,280		6,115,988
Other liabilities	102,533,666		73,641,115
Total current liabilities	1,876,593,445		1,771,635,147
NON-CURRENT LIABILITIES
Accounts payable	23,764,542		22,365,991
Long-term debt	2,132,867,597		2,138,246,066
Salaries and Social Security payable	352,363		478,956
Taxes payable	104,734,017		129,545,361
Sellers financing	119,458,001		116,250,465
Other liabilities	237,299,738		293,098,838
Provisions	127,823,687		129,763,743
Total non-current liabilities	2,746,299,945		2,829,749,420
Total liabilities	4,622,893,390		4,601,384,567
MINORITY INTEREST	766,475,408		708,556,355
SHAREHOLDERS' EQUITY	3,023,207,664		2,780,933,309
Total liabilities, minority interest and shareholders' equity	8,412,576,462		8,090,874,231

 

CONSOLIDATED STATEMENTS OF INCOME

For the six-month periods ended June 30, 2010 and 2009

In Argentine Pesos (Ps.)

 

 

	June 30, 2010		June 30, 2009
Net sales	3,516,095,342		3,227,162,935
Cost of sales (excluding depreciation and amortization)	(1,635,509,436)		(1,602,467,789)
Subtotal	1,880,585,906		1,624,695,146
Expenses (excluding depreciation and amortization)
Selling expenses	(323,477,746)		(301,857,458)
Administrative expenses	(404,084,665)		(359,874,701)
Expenses subtotal	(727,562,411)		(661,732,159)
Depreciation of property, plant and equipment (1) and other investments	(233,439,602)		(230,588,450)
Amortization of intangible assets, goodwill and other assets	(64,874,503)		(68,879,667)
Depreciation and amortization subtotal	(298,314,105)		(299,468,117)
Financing and holding results
Generated by assets
Interest	8,088,505		14,474,852
Other taxes and expenses	(48,401,288)		(47,733,314)
Impairment of inventories and materials	(2,224,413)		(1,826,536)
Exchange differences	10,253,622		25,695,494
Holding gains on inventories	11,377,008		5,878,616
Holding gains (losses) on derivatives	3,451,113		(10,753,004)
Effect of financial discounts on assets and other	(3,868,283)		(1,394,705)
Generated by liabilities
Interest	(111,535,989)		(176,980,960)
Exchange differences	(90,210,959)		(274,626,602)
Effect of financial discounts on liabilities	(16,216,815)		43,205,945
CER restatement	(958,657)		(391,416)
Holding losses on derivatives	(449,600)		(354,000)
Other	(170,944)		(1,578,088)
Equity in earnings from unconsolidated affiliates, net	2,236,593		4,870,567
Other income (expense), net	533,995		(528,294)
Income before income tax, tax on assets and minority interest	616,613,278		241,453,425
Income tax and tax on assets	(232,835,173)		(102,342,885)
Minority interest	(136,692,113)		(48,215,779)
Income for the period	247,085,992		90,894,761

 

(1)Chargeable to:

Cost of sales	(204,681,480)	(209,070,626)
Selling expenses	(16,307,028)	(10,195,487)
Administrative expenses	(12,451,094)	(11,247,736)

 

 

The Consolidated Statements of Operations for each business segment are included in the Financial Statements as of June 30, 2010, available at http://www.grupoclarin.com/ir

 

 

cONSOLIDATED STATEMENTS OF CASH FLOWS

For the six-month periods ended June 30, 2010 and 2009

In Argentine Pesos (Ps.)

 

 

	June 30, 2010		June 30, 2009
CASH PROVIDED BY OPERATING ACTIVITIES
Income for the period	247,085,992		90,894,761
Income tax and tax on assets	232,835,173		102,342,885
Accrued interest	103,447,484		162,506,108
Adjustments to reconcile net income for the period to cash provided by operating activities:
Depreciation of property, plant and equipmentand other investments	233,439,602		230,588,450
Amortization of intangible assets, goodwill and other assets	64,874,503		68,879,667
Allowance for doubtful accounts	(7,760,632)		26,430,655
Provision for contingencies	19,265,315		20,016,408
Allowance for impairment of inventories and materials	2,224,413		1,826,536
Exchange difference and other financial results	92,567,723		206,511,463
Equity in earnings from unconsolidated affiliates, net	(2,236,593)		(4,870,567)
Minority interest	136,692,113		48,215,779
Holding losses on derivatives	(3,001,513)		11,107,004
Holding (gains) losses on inventories	(11,377,008)		(5,878,616)
Results on sale of property, plant and equipment	5,156		(9,163,725)
Changes in assets and liabilities:
Trade receivables	(58,637,563)		(70,893,448)
Other receivables	(29,300,953)		(70,391,898)
Inventories	(23,152,659)		7,435,665
Other assets	(1,643,560)		(34,896)
Accounts payable	153,789,284		6,687,399
Salaries and Social Security payable	(30,130,301)		2,309,566
Taxes payable	(112,068,998)		(36,153,501)
Other liabilities	30,000,591		12,824,372
Provisions	(8,635,225)		(16,130,014)
Income tax and tax on assets payments	(264,891,449)		(52,161,665)
Cash provided by operating activities	763,390,895		732,898,388
CASH USED IN INVESTMENT ACTIVITIES
Acquisition of property, plant and equipment, net	(503,177,155)		(363,273,125)
Acquisition of intangible assets	(4,675,465)		(4,387,447)
Acquisition of subsidiaries, net of cash acquired	-		(1,498,542)
Proceeds from sale of property, plant and equipment	853,449		17,154,688
Collection of loans	3,849,499		12,500,000
Collection of interest	-		1,071,061
Collection of dividends	9,469,412		2,161,341
Cash used in investment activities	(493,680,260)		(336,272,024)

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWs

For the six-month periods ended June 30, 2010 and 2009

In Argentine Pesos (Ps.)

 

 

	June 30, 2010		June 30, 2009
CASH USED IN FINANCING ACTIVITIES
Loans obtained	40,712,173		30,885,429
Payment of loans	(87,079,240)		(108,818,203)
Payment of interest	(29,746,875)		(85,534,142)
Net (payments) collections of derivatives	(8,988,613)		2,826,123
Payment of sellers financing	(1,034,520)		(156,263,829)
Reserve account / Escrow funds	(126,047,082)		(115,348,171)
Restricted funds	-		(5,000,000)
Payments to minority shareholders	(63,680,279)		(18,696,043)
Cash used in financing activities	(275,864,436)		(455,948,836)
FINANCING AND HOLDING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS	11,796,855		22,429,320
Net Increase (decrease) in cash flow	5,643,054		(36,893,152)
Cash and cash equivalents at the beginning of the year	459,135,441		467,592,070
Losses on deconsolidation of subsidiaries	(42,633,400)		-
Cash and cash equivalents at period end (1)	422,145,095		430,698,918

 

(1)Includes:

Cash and banks	317,057,383		344,012,841
Investments with maturities of less than three months	105,087,712		86,686,077

 

 

 

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