RMG.L Regulatory News (RMG)

23 Jan 2009 07:00

RAMBLER MEDIA2008 FULL YEAR UNAUDITED TRADING UPDATE

Revenue up 60% year-on-year to US$110 million

Profitability improvement halted in Q4 2008due to adverse macroeconomic conditions

Rambler Media Ltd. ("Rambler" or the "Company"), operating one of Russia's most popular internet brands, today issues the following trading update on its unaudited financial results for the twelve months ended 31 December 2008.

Consolidated revenue (including Begun's partner network) is expected to increase by around 60% year-on-year to approximately US$110.0 million (2007, US$69.1 million), with display and context advertising contributing approximately 44% of total sales each Q4 2008, which is usually the strongest quarter in the year, expected to show sales down approximately 5% year-on-year and a negative EBITDA due to adverse macroeconomic conditions Full year 2008 EBITDA margin expected between 10% and 15% Strong balance sheet with cash position of approximately US$29.0 million at December 31, 2008, inclusive of US$4.0 million in Begun before minority interest Significant cost saving initiatives being implemented in order to reduce underlying cost base in 2009, including a 10-15% reduction in staff

As indicated in November 2008, Rambler started witnessing a noticeable slowdown in advertising spend in Russia across all sectors and lasting the entire fourth quarter, which is traditionally the Company's strongest quarter. Despite adverse conditions, it is expected that the Company will record sales of US$110.0 million for the full year, which is at the upper end of its guidance and demonstrates a growth of around 60% from 2007 sales. However, the slowdown experienced in Q4 2008, with sales down 5% year-on-year, has had a negative impact on EBITDA and halted the progress that the Company had demonstrated in the previous five quarters.

The Company estimates that the recent slowdown in sales is likely to continue through the first half of 2009. At this point Rambler anticipates advertising revenue to remain at similar levels in 2009 compared to 2008. The Company intends to boost the profitability of its operations through a cost reduction programme which began in Q4 2008 and is intended to deliver benefits in 2009. However, it is important to note that, although the Company transacts primarily in Rubles, it reports in US$. The continuing weakening of the Ruble/US$ exchange rate is therefore anticipated to have an impact on the Company's reported US$ results.

Rambler's websites remain among the most frequently visited in Russia with over 38 million unique monthly users on average in the last twelve months. Rambler intends to continue to generate free cash flow from operations in 2009 and has a robust balance sheet.

In the longer-term, the Company believes that advertisers will allocate an increasing proportion of their advertising spend online. The underlying dynamics of more Russian consumers coming online and online users continuing to increase their media consumption via the internet, is set to continue. Furthermore, continued growth in broadband connectivity tends to drive up consumers' time on line. In longer established consumer internet markets, users get up to 25% of their media consumption online, and the allocation of advertising spend to the internet is approximately 10-15%. In Russia both these numbers are much lower with the advertising spend allocation to the internet approximately 3-4% of total spend. The Company therefore estimates that the internet continues to offer strong relative growth opportunities in Russia, and as a top internet brand, Rambler occupies a favourable market position.

Forward-looking statements

Certain statements in this trading update are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

For further information, please visit www.ramblermedia.com or contact:

Rambler Media					Shared Value Limited
Mark Opzoomer / Nikita Serguienko					Nicolas Duperrier
Tel. +7 495 500 3826					Tel. +44 (0) 20 7321 5010
					rambler@sharedvalue.net
Rambler Media
Russian press office
Tel. +7 495 745 3619

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ABOUT RAMBLER MEDIA

Rambler Media is an internet media and services group which operates or has interests in leading Russian language internet brands including the Russian internet homepage and search engine 'Rambler.ru', on-line newspaper 'Lenta.ru', product comparison website 'Price.ru', internet catalogue and navigation system 'Top 100', instant messaging service 'Rambler-ICQ', digital advertising agency 'Index20' and contextual advertising company 'Begun'. Rambler Media's shares are traded on AIM, the junior market of the London Stock Exchange under the symbol 'RMG'.

For more information on Rambler Media, visit our corporate website at www.ramblermedia.com.

Copyright Business Wire 2009