7th Nov 2008 12:15
Grupo Clarín announces its Results for
the Third Quarter and First Nine Months of 2008
Buenos Aires, Argentina, November 7, 2008 - Grupo Clarín S.A. ("Grupo Clarín" or the "Company" - LSE: GCLA; BCBA: GCLA), the largest media company in Argentina, announced today its results for the third quarter and the first nine months of 2008. Figures in this report have been prepared in accordance with Argentine GAAP as of September 30, 2008 and are stated in Argentine Pesos, unless otherwise indicated.
Highlights (9M08 vs. 9M07):
Net Sales totaled Ps. 4,110.8 million, an increase of 31.9% from 9M07, mainly due to subscriber and ARPU growth in the Cable TV and Internet segment and, to a lesser extent, to higher advertising sales in Printing and Publishing, and higher advertising and programming sales in the Broadcasting and Programming segment.
Adjusted EBITDA(1) reached Ps. 1,216.5 million, an increase of 27.8% from 9M07, driven by higher sales in the Cable and Internet, Printing and Publishing and Broadcasting and Programming segments.
Grupo Clarín's Adjusted EBITDA Margin (2) was 29.6% for 9M08, compared to 30.5% in 9M07.
Net Income totaled Ps. 276.9 million, an increase of 125.4% from Ps. 122.8 million reported in 9M07.
Comments from the Vice Chairman of Grupo Clarín:
Mr. José A. Aranda, Vice Chairman of Grupo Clarín, stated, "I am pleased to report Grupo Clarín's results for the third quarter of 2008. In the midst of a challenging environment, our Company continues to show a good performance, especially in the Cable TV and Internet access segment. The diversity of our products and the strength of our market position, along with the proven ability of the management team, reaffirm my confidence in our capacity to conduct our strategy and to consolidate the Company's leadership in its core businesses."
FINANCIAL HIGHLIGHTS
|
(In millions of Ps.)
|
9M08
|
9M07
|
% Var.
|
3Q08
|
3Q07
|
% Var.
|
|
Net Sales
|
4,110.8
|
3,117.5
|
31.9%
|
1,506.0
|
1,152.7
|
30.7%
|
|
Adjusted EBITDA (1)
|
1,216.5
|
952.1
|
27.8%
|
451.8
|
335.5
|
34.7%
|
|
Adjusted EBITDA Margin % (2)
|
29.6%
|
30.5%
|
-3.1%
|
30.0%
|
29.1%
|
3.1%
|
|
Net Income
|
276.9
|
122.8
|
125.4%
|
60.1
|
19.3
|
210.7%
|
(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.
Investor Relations Contacts
In Buenos Aires:
Alfredo Marín, M. Julia Díaz Ardaya,
Alejandro Yu
Grupo Clarín
www.grupoclarin.com/ir
In London:Alex Money, Lorna Ellen
Temple Bar Advisory Ltd.
Tel: +44 20 7002 1080
In New York:
Melanie Carpenter, Pete Majeski
I-advize Corporate Communications
Tel: +1 212 406 3692
OPERATING RESULTS
Net sales reached Ps. 4,110.8 million, an increase of 31.9% from Ps. 3,117.5 million in 9M07 due to subscriber and ARPU growth in the Cable TV and Internet segment and, to a lesser extent, to higher advertising sales in Printing and Publishing, and higher advertising and programming sales in the Broadcasting and Programming segment.
Following is a breakdown of Net Sales by business segment:
NET SALES
|
(In millions of Ps.) |
9M08 |
9M07 |
% Var. |
3Q08 |
3Q07 |
% Var. |
|
Cable TV and Internet access |
2,480.2 2,480.2 |
1,890.9 |
31.2% |
913.9 |
671.9 |
36.0% |
|
Printing and Publishing |
1,088.2 |
819.1 |
32.9% |
382.8 |
294.7 |
29.9% |
|
Broadcasting and Programming |
713.7 |
550.0 |
29.8% |
270.1 |
223.5 |
20.8% |
|
Digital Content and Others |
124.1 |
100.2 |
23.9% |
46.6 |
35.2 |
32.2% |
|
Subtotal |
4,406.1 |
3,360.1 |
31.1% |
1,613.4 |
1,225.4 |
31.7% |
|
Eliminations |
(295.3) |
(242.6) |
21.7% |
(107.4) |
(72.7) |
47.7% |
|
Total |
4,110.8 |
3,117.5 |
31.9% |
1,506.0 |
1,152.7 |
30.7% |
Cost of sales (Excluding Depreciation and Amortization) reached Ps. 2,015.6 million, an increase of 33.2% from Ps. 1,512.7 million reported for 9M07 due to higher costs in our business segments, mainly in Cable TV and Internet access due to subscriber growth, but also in the Printing and Publishing and Broadcasting and Programming segments.
Selling and Administrative Expenses (Excluding Depreciation and Amortization) reached Ps. 878.7 million, an increase of 34.6% from Ps. 652.6 million in 9M07. This increase was mainly due to higher costs in both Printing and Publishing and Cable TV and Internet access segments.
Financial results net totaled Ps. (235.2) million from Ps. (345.6) million for 9M07, the decrease was mainly due to the fact that the peso did not depreciate during these nine months as it did during the same period in 2007, and due to a decrease in interest generated by liabilities as a consequence of a lower level of debt.
Equity in earnings from unconsolidated affiliates in 9M08 totaled Ps. 6.2 million, compared to Ps. 7.8 million for 9M07.
Other expenses, net reached Ps. (14.0) million, compared to Ps. (16.5) million in 9M07.
Adjusted EBITDA reached Ps. 1,216.5 million, an increase of 27.8% from Ps. 952.1 million reported for 9M07, driven by higher sales in the Cable and Internet, Printing and Publishing and Broadcasting and Programming segments, partially offset by increasing costs.
Following is a breakdown of adjusted EBITDA by business segment:
ADJUSTED EBITDA
|
(In millions of Ps.) |
9M08 |
9M07 |
% Var. |
3Q08 |
3Q07 |
% Var. |
|
Cable TV and Internet access |
884.1 |
645.5 |
37.0% |
318.7 |
226.5 |
40.7% |
|
Printing and Publishing |
220.5 |
186.2 |
18.5% |
84.2 |
60.6 |
39.0% |
|
Broadcasting and Programming |
107.4 |
93.7 |
14.7% |
47.2 |
38.7 |
22.1% |
|
Digital Content and Others |
4.5 |
26.8 |
-83.3% |
1.7 |
9.8 |
-82.5% |
|
Subtotal |
1,216.5 |
952.1 |
27.8% |
451.8 |
335.5 |
34.7% |
|
Eliminations |
- |
- |
NA |
- |
- |
NA |
|
Total |
1,216.5 |
952.1 |
27.8% |
451.8 |
335.5 |
34.7% |
Net income totaled Ps. 276.9 million, an increase of 125.4% from Ps. 122.8 million reported for 9M07, mainly due to higher net income in the Cable TV and Internet access segment, and also due to less fluctuation in the exchange rate during this period and to a lower level of debt.
Income tax as of September 2008, reached Ps. 256.2 million, from Ps. 126.0 million in 9M07.
Cash used in acquisitions of property, plant and equipment (CAPEX) totaled Ps. 645.8 million in the first nine months, an increase of 61.3% from Ps. 400.4 million reported for 9M07. Out of the total CAPEX in 9M08, 89.1% was allocated to the Cable TV and Internet access segment, 7.0% to the Printing and Publishing segment and the remaining 3.9% to other activities. Our Capex in the Cable TV and Internet access segment contemplates network upgrades, digitalization and further development of the triple play strategy.
Debt profile (1): Debt coverage ratio for the period ended September 30, 2008, was 1.6x, while Net Debt at the end of this period totaled Ps. 2,552.2 million.
(1) Debt Coverage Ratio is defined as Total Financial Debt minus Cash and Equivalents divided by Adjusted EBITDA (last 12 months). Total Financial debt is defined as financial loans and debt for acquisitions, including accrued interest.
SALES BREAKDOWN BY SOURCE OF REVENUE - SEPTEMBER 2008
|
(In millions of Ps.) |
Cable TV & Internet access |
Printing & Publishing |
Broadcasting & Programming |
Digital Content & Others |
Eliminations |
Total |
% |
|
Advertising |
32.1 |
606.8 |
374.8 |
26.2 |
(57.6) |
982.2 |
23.9% |
|
Circulation |
- |
301.4 |
- |
- |
- |
301.4 |
7.3% |
|
Printing |
- |
99.7 |
- |
- |
(19.4) |
80.3 |
2.0% |
|
Video Subscriptions |
1,979.4 |
- |
- |
- |
(0.0) |
1,979.3 |
48.1% |
|
Internet Subscriptions |
451.1 |
- |
- |
- |
(1.0) |
450.1 |
10.9% |
|
Programming |
- |
- |
287.5 |
- |
(121.7) |
165.8 |
4.0% |
|
Other Sales |
17.6 |
80.3 |
51.4 |
97.9 |
(95.5) |
151.8 |
3.7% |
|
Total Sales |
2,480.2 |
1,088.2 |
713.7 |
124.1 |
(295.3) |
4,110.8 |
100.0% |
SALES BREAKDOWN BY SOURCE OF REVENUE - SEPTEMBER 2007
|
(In millions of Ps.) |
Cable TV & Internet access |
Printing & Publishing |
Broadcasting & Programming |
Digital Content & Others |
Eliminations |
Total |
% |
|
Advertising |
27.4 |
435.7 |
328.4 |
11.6 |
(56.7) |
746.4 |
23.9% |
|
Circulation |
- |
241.9 |
- |
- |
- |
241.9 |
7.8% |
|
Printing |
- |
81.5 |
- |
- |
(14.6) |
66.9 |
2.1% |
|
Video Subscriptions |
1,487.7 |
- |
- |
- |
- |
1,487.7 |
47.7% |
|
Internet Subscriptions |
365.1 |
- |
- |
- |
- |
365.1 |
11.7% |
|
Programming |
- |
- |
184.1 |
- |
(84.4) |
99.7 |
3.2% |
|
Other Sales |
10.6 |
59.9 |
37.5 |
88.5 |
(86.9) |
109.7 |
3.5% |
|
Total Sales |
1,890.9 |
819.1 |
550.0 |
100.2 |
(242.6) |
3,117.5 |
100.0% |
RESULTS BY BUSINESS SEGMENT
CABLE TV AND INTERNET ACCESS
Net Sales
Net sales increased by 31.2% to Ps. 2,480.2 million for the first nine months of 2008 compared to Ps. 1,890.9 million for the 9M07. The increase in net sales was mostly attributable to the increase in subscription charges registered during the last twelve months, and also to growth in Cable, Broadband and Digital subscribers. Total Cable TV basic subscribers reached 3,154,696 as of September 2008, compared to the 2,969,790 reported in the same date in 2007. Internet subscribers reached 904,458 in the first nine months of 2008, compared to the 716,142 of the first nine months of 2007.
Cost of Sales (Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 32.6% to Ps. 1,060.6 million for 9M08, compared to Ps. 799.7 million for the same period in 2007. This was mainly due to the increase in our programming costs attributable to growth in our subscriber base and pricing adjustments linked to basic monthly fee increases -contemplated in certain programming contracts-, the effect of salary increases and higher expenses for maintenance of property, plant and equipment and network expenses.
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 20.1% to Ps. 535.5 million for 9M08, compared to Ps. 445.7 million reported for the same period in 2007. This increase was mainly due to the increase in expenses for salaries, wages, social security charges and which was partially offset by lower management fees paid during the period.
Depreciation and Amortization
Depreciation expenses of property, plant and equipment increased by 1.1% to Ps. 265.0 million for 9M08 from Ps. 262.1 million reported for the same period in 2007.
PRINTING AND PUBLISHING
Net Sales
Net sales increased by 32.9% to Ps. 1,088.2 million in 9M08, compared to Ps. 819,1 million in 9M07. This was the result of higher sales in advertising and optional products, higher sales in our commercial printing company, and the consolidation of the increased ownership in Papel Prensa.
Cost of Sales (Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 37.1% to Ps. 576.5 million in 9M08, compared to Ps. 420.6 million in 9M07. The increase was primarily the result of higher wages and salaries and an increase in raw material costs.
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 37.2% to Ps. 291.2 million in 9M08, compared to the Ps. 212.3 million reported for 9M07. The increase was primarily the result of an increase in advertising expenses, wages and salaries and in fees for services.
Depreciation and Amortization
Depreciation and amortization expenses increased by 57.8% to Ps. 44.5 million in 9M08 compared to Ps.28.2 million in 9M07. The increase reflects capital expenditures made during 2006 and 2007.
The results in this segment for 9M08 reflect the 100% CIMECO consolidation.
BROADCASTING AND PROGRAMMING
Net Sales
Net sales increased by 29.8% to Ps. 713.7 million (including Ps. 124.1 million in sales to other segments) in 9M08, compared to Ps. 550.0 million (including Ps. 108.2 million in sales to other segments) in 9M07. The increase was primarily the result of higher advertising and sports programming sales and the increases in the pricing of cable signals, attributable to contract formulas that link pricing to increases in the monthly fees.
Cost of Sales (Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 33.3% to Ps. 473.4 million in 9M08, compared to Ps. 355.1 million in 9M07. The increase was primarily the result of higher programming and production costs, higher salaries and also higher costs associated with the renegotiation of TV rights for soccer matches, as well as the result of new acquisitions.
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 31.2% to Ps. 132.8 million in 9M08, compared to Ps. 101.3 million in 9M07. The increase was primarily the result of higher salaries and wages, as well as the result of new acquisitions.
Depreciation and Amortization
Depreciation and amortization expenses increased by 27.8% to Ps. 16.2 million in 9M08 compared to Ps. 12.7 million reported for 9M07.
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 23.9% compared to the same period in 2007, and EBITDA resulted in 4.5 million, the decrease in EBITDA was mainly attributable to a reduction in the management fees that Grupo Clarín received from the Cable TV and Internet access segment and also because of the increase in costs and salaries.
OPERATING STATISTICS BY BUSINESS SEGMENT
CABLE TV AND INTERNET ACCESS
|
9M08 |
9M07 |
% Var. |
3Q08 |
2Q08 |
% Var. |
|
|
Homes Passed (1) |
6,753.6 |
6,753.6 |
0.0% |
6,753.6 |
6,753.6 |
0.0% |
|
Bidirectional Homes Passed |
47% |
42% |
11.2% |
47% |
47% |
-0.6% |
|
Cable TV |
||||||
|
Total Subscribers (1) |
3,154.7 |
2,969.8 |
6.2% |
3,154.7 |
3,096.3 |
1.9% |
|
Subscribers - Argentina |
2,978.2 |
2,808.8 |
6.0% |
2,978.2 |
2,926.5 |
1.8% |
|
Subscribers - International |
176.5 |
160.9 |
9.7% |
176.5 |
169.7 |
4.0% |
|
Uruguay |
86.5 |
80.3 |
7.8% |
86.5 |
83.1 |
4.1% |
|
Paraguay |
90.0 |
80.7 |
11.6% |
90.0 |
86.7 |
3.8% |
|
% over Homes Passed |
46.7% |
44.0% |
6.2% |
46.7% |
45.8% |
1.9% |
|
Churn Rate % |
14.6% |
12.7% |
15.1% |
14.2% |
16.6% |
-14.5% |
|
Digital Video |
||||||
|
Digital ready Pay TV Subs (1) |
1,893.9 |
1,354.3 |
39.8% |
1,893.9 |
1,768.4 |
7.1% |
|
Subscribers (1) |
343.2 |
165.0 |
108.0% |
343.2 |
305.1 |
12.5% |
|
Penetration over Digital Ready TV Subs |
18.1% |
12.2% |
48.7% |
18.1% |
17.3% |
5.0% |
|
Internet Subscribers |
||||||
|
Total Internet Subscribers (1) |
904.5 |
716.1 |
26.3% |
904.5 |
842.5 |
7.3% |
|
Cablemodem(1) |
845.6 |
610.6 |
38.5% |
845.6 |
774.9 |
9.1% |
|
ADSL(1) |
40.3 |
70.9 |
-43.1% |
40.3 |
45.7 |
-11.9% |
|
Dial Up (1) |
18.6 |
34.7 |
-46.5% |
18.6 |
21.9 |
-15.2% |
|
% over Bidirectional Homes Passed |
28.7% |
25.2% |
13.6% |
28.7% |
26.5% |
8.0% |
|
Total ARPU(2) |
89.2 |
72.4 |
23.3% |
97.5 |
88.8 |
9.8% |
(1) Figures in thousands
(2) Average Net Sales/ Average Pay TV Subscribers
PRINTING AND PUBLISHING
|
9M08 |
9M07 |
% Var. |
3Q08 |
3Q07 |
% Var. |
|
|
Circulation (1) |
432.4 |
446.9 |
-3.2% |
429.4 |
438.4 |
-2.1% |
|
Circulation share (%) (2) |
48.1% |
49.8% |
-3.3% |
48.7% |
50.1% |
-2.8% |
|
Advertising share %(2) |
60.4% |
60.0% |
0.7% |
58.5% |
59.1% |
-1.1% |
(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. Company estimates.
BROADCASTING AND PROGRAMMING
|
9M08 |
9M07 |
% Var. |
3Q08 |
3Q07 |
% Var. |
|
|
Advertising Share % (1) |
41.4% |
46.2% |
-10.4% |
40.5% |
47.0% |
-13.8% |
|
Audience Share % (2) |
||||||
|
Prime Time |
44.9% |
41.5% |
8.2% |
42.0% |
45.9% |
-8.6% |
|
Total Time |
34.4% |
33.7% |
2.2% |
32.2% |
36.1% |
-10.8% |
(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. PrimeTime is defined as Monday through Friday from 8pm to 12am. Total Time is defined as Monday through Sunday from 12 pm to 12 am.
DIGITAL CONTENT AND OTHERS
|
Sept-08 |
Sept-07 |
% Var. |
|
|
Page Views (1) |
566.4 |
345.5 |
63.9% |
|
Unique Visitors (1) |
15.6 |
9.3 |
67.6% |
(1) In millions, source IAB
DEBT AND LIQUIDITY
|
(In millions of Ps.) |
Sept - 08 |
Sept - 07 |
% Var. |
|
Short Term and Long Term Debt |
|||
|
Current Financial Debt |
405.9 |
517.1 |
-21.5% |
|
Financial loans |
121.6 |
334.6 |
-63.7% |
|
Negotiable obligations |
106.6 |
99.6 |
7.0% |
|
Accrued interest |
49.5 |
44.0 |
12.6% |
|
Acquisition of equipment |
3.5 |
3.8 |
-8.8% |
|
Sellers Financing Capital |
101.2 |
11.9 |
752.5% |
|
Sellers Financing accrued interest |
23.6 |
23.3 |
1.3% |
|
Non-Current Financial Debt |
2,572.8 |
2,947.5 |
-12.7% |
|
Financial loans |
55.5 |
82.2 |
-32.4% |
|
Negotiable obligations |
1,933.5 |
1,998.4 |
-3.2% |
|
Accrued interest |
1.7 |
0.9 |
104.9% |
|
Acquisition of equipment |
0.7 |
0.9 |
-21.3% |
|
Sellers Financing |
581.3 |
865.2 |
-32.8% |
|
Total Financial Debt (A) |
2,978.8 |
3,464.6 |
-14.0% |
|
Bank overdraft |
11.1 |
6.3 |
76.2% |
|
Measurement at fair Value |
(48.5) |
(85.3) |
-43.2% |
|
Total Short Term and Long Term Debt |
2,941.4 |
3,385.7 |
-13.1% |
|
Cash and Cash Equivalents (B) |
426.6 |
427.5 |
-0.2% |
|
Net Debt (A) - (B) |
2,552.2 |
3,037.2 |
-16.0% |
|
Net Debt/Adjusted Ebitda (Last 12 Months) |
1.6x |
2.4x |
-35.0% |
|
% USD Debt |
81.3% |
80.6% |
0.9% |
|
% Ar. Ps Debt |
18.7% |
19.4% |
-3.6% |
Negotiable obligations include Cablevisión USD 114.4 MM notes due October 2012; Cablevisión USD 235.1 MM notes due October 2015, Multicanal USD 105.8 MM notes due July 2013 and Multicanal USD 80.3 MM notes due July 2016, and AGEA Ps. 262.5 MM notes due 2011.
Total Financial Debt(1) and Net Debt, decreased from Ps. 3,464.6 million to Ps. 2,978.8 million and from Ps. 3,037.2 million to Ps. 2,552.2 million, respectively, since September 2007. This represents a reduction of 14.0% in the Total Debt and of 16.0% in the Net Debt.
Debt coverage ratio (1) as of September 30, 2008 was 1.6x in the case of Net Debt and of 1.8x in terms of Total Financial Debt.
(1) Debt Coverage Ratio is defined as Total Financial Debt minus Cash and Equivalents divided by Adjusted EBITDA (last 12 months). Total Financial debt is defined as financial loans and debt for acquisitions, including accrued interest.
RECENT EVENTS
CABLEVISIÓN MERGER
On October 29, 2008, Cablevisión S.A. and Multicanal S.A. approved the initiation of dealings and technical procedures towards the merger into Cablevisión of its subsidiaries Multicanal, Pampa TV S.A., Delta Cable S.A., Holding Teledigital Cable S.A., Teledigital Cable S.A., Televisora La Plata Sociedad Anónima, Construred S.A. and Cablepost S.A. As a result of the merger, Cablevisión would become the surviving company and the successor in all of the activities and operations of the absorbed companies, which would be dissolved without liquidation. The merger dealings are initiated to simplify Cablevisión's corporate structure and optimize operations. As a basis for the formal merger procedures, the companies will use their respective financial statements as of September 30, 2008 and the merger will be deemed effective as of and including October 1, 2008. Once the dealings are concluded, the companies will execute a merger commitment subject to the approval of the boards of directors and shareholders of each company. Multicanal will also call a meeting of the holders of its outstanding notes in order to harmonise their terms and conditions with those of the outstanding notes of Cablevisión.
INCREASED STAKE IN POL-KA
On September 2, 2008, Grupo Clarín S.A. informed that it had entered into an agreement to purchase 25% of the issued and outstanding capital stock and votes of Pol-Ka Producciones S.A. and SB Producciones S.A. through its subsidiary ARTEAR, from the holders of 70% of the shares of the companies. Through this agreement, ARTEAR -which already held 30% of the capital stock and votes of content producers Polka and SB- increases its participation to 55%. The total price agreed for the acquired stock was US$ 2.5 million.
CABLEVISIÓN LAUNCHES DVR AND HD
On November 2, 2008, Cablevisión launched two High Definition Channels and a DVR service. This new service allows Cablevisión's digital subscribers to record over one hundred hours of programming and also to receive two high quality HD channels: Movie City HD and HBO HD. The service requires the use of a special DVR set top box and offers several alternatives to obtain the equipment, such as purchase or rental. The service is initially available in Buenos Aires and the greater Buenos Aires Area, and in cities such as La Plata, Zárate, Campana and Mercedes.
CONFERENCE CALL AND WEBCAST INFORMATION
Grupo Clarín will host a conference call and webcast to discuss its third quarter and nine month results for 2008, on Friday, November 7, 2008.
Time: 2:00 pm Buenos Aires Time/4:00 pm London Time/11:00 am New York Time
Presentations by: Alejandro Urricelqui, Chief Financial Officer; Alfredo Marín, Investor Relations Officer.
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 pass code is: 6118
To access the simultaneous webcast presentation, please direct your browser to: http://www.grupoclarin.com.ar/ir The slides-only presentation will be available in the Investor Kit section of the Website prior to the call.
A replay of the conference call will be available one hour after its conclusion, and will remain available for two months. To access the replay, please dial: from the within the U.S. + 1 (877) 919 4059 or from anywhere outside the U.S. +1 (334) 323 7226. The pass code is: 36946714. The webcast presentation will be archived at http://www.grupoclarin.com.ar/ir/
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. It's Cable Television network is the largest in Latin America, with the largest broadband subscriber base in Argentina. Its flagship newspaper -Diario Clarín- is the highest circulation newspaper in Latin America and the second-highest circulation Spanish-language newspaper in the world. Grupo Clarín is the largest 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 September 30, 2008 and December 31, 2007
In Argentine Pesos (Ps.)
|
|
September 30, 2008
|
|
December 31, 2007
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and banks
|
213,399,823
|
|
219,760,595
|
|
Short-term investments
|
213,174,370
|
|
345,699,907
|
|
Trade receivables, net
|
630,790,880
|
|
569,117,703
|
|
Other receivables, net
|
194,432,635
|
|
142,290,047
|
|
Inventories
|
276,869,261
|
|
168,195,918
|
|
Other assets
|
44,799,320
|
|
48,419,337
|
|
|
|
|
|
|
Total current assets
|
1,573,466,289
|
|
1,493,483,507
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
Trade receivables, net
|
11,380,875
|
|
10,839,314
|
|
Other receivables, net
|
173,304,429
|
|
203,134,042
|
|
Inventories
|
35,652,507
|
|
41,078,789
|
|
Investment in unconsolidated affiliates
|
39,997,189
|
|
31,132,115
|
|
Other investments
|
6,934,441
|
|
8,394,731
|
|
Property, plant and equipment, net
|
2,238,666,995
|
|
1,665,732,947
|
|
Intangible assets, net
|
907,762,984
|
|
983,230,664
|
|
Other assets
|
240,014
|
|
120,007
|
|
|
|
|
|
|
Subtotal
|
3,413,939,434
|
|
2,943,662,609
|
|
Goodwill
|
2,719,136,046
|
|
2,575,035,311
|
|
|
|
|
|
|
Total non-current assets
|
6,133,075,480
|
|
5,518,697,920
|
|
|
|
|
|
|
Total assets
|
7,706,541,769
|
|
7,012,181,427
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
608,039,785
|
|
516,401,732
|
|
Long-term debt
|
292,304,045
|
|
228,733,303
|
|
Salaries and Social Security payable
|
205,479,288
|
|
163,434,344
|
|
Taxes payable
|
316,705,315
|
|
242,901,986
|
|
Sellers financing
|
124,769,362
|
|
31,208,165
|
|
Other liabilities
|
141,399,449
|
|
92,639,038
|
|
|
|
|
|
|
Total current liabilities
|
1,688,697,244
|
|
1,275,318,568
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
11,621,860
|
|
9,876,692
|
|
Long-term debt
|
1,943,039,856
|
|
1,986,879,514
|
|
Salaries and Social Security payable
|
148,491
|
|
163,998
|
|
Taxes payable
|
14,721,658
|
|
18,133,529
|
|
Sellers financing
|
581,317,508
|
|
703,260,133
|
|
Other liabilities
|
325,371,391
|
|
220,156,122
|
|
Provisions
|
120,175,635
|
|
131,235,431
|
|
|
|
|
|
|
Total non-current liabilities
|
2,996,396,399
|
|
3,069,705,419
|
|
|
|
|
|
|
Total liabilities
|
4,685,093,643
|
|
4,345,023,987
|
|
|
|
|
|
|
MINORITY INTEREST
|
539,680,156
|
|
430,176,380
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY
|
2,481,767,970
|
|
2,236,981,060
|
|
|
|
|
|
|
Total liabilities, minority interest and shareholders’ equity
|
7,706,541,769
|
|
7,012,181,427
|
CONSOLIDATED STATEMENTS OF OPERATIONS
For the nine-month periods ended September 30, 2008 and 2007
In Argentine Pesos (Ps.)
|
|
September 30, 2008
|
|
September 30, 2007
|
|
|
|
|
|
|
Net sales
|
4,110,817,389
|
|
3,117,495,091
|
|
Cost of sales (excluding depreciation and amortization)
|
(2,015,619,842)
|
|
(1,512,734,017)
|
|
|
|
|
|
|
Subtotal
|
2,095,197,547
|
|
1,604,761,074
|
|
|
|
|
|
|
Expenses (excluding depreciation and amortization)
|
|
|
|
|
Selling expenses – Exhibit H Consolidated
|
(416,612,020)
|
|
(322,775,934)
|
|
Administrative expenses – Exhibit H Consolidated
|
(462,067,843)
|
|
(329,856,149)
|
|
|
|
|
|
|
Expenses subtotal
|
(878,679,863)
|
|
(652,632,083)
|
|
|
|
|
|
|
Depreciation of property, plant and equipment (1)
|
(236,452,066)
|
|
(213,658,278)
|
|
Amortization of intangible and other assets
|
(93,773,653)
|
|
(90,946,916)
|
|
Goodwill amortization
|
189,758
|
|
-
|
|
Depreciation of other investments
|
(111,902)
|
|
(107,294)
|
|
|
|
|
|
|
Depreciation and amortization subtotal
|
(330,147,863)
|
|
(304,712,488)
|
|
|
|
|
|
|
Financing and holding results
|
|
|
|
|
Generated by assets
|
|
|
|
|
Interest
|
14,590,975
|
|
18,642,224
|
|
Other taxes and expenses
|
(62,953,432)
|
|
(43,940,521)
|
|
Impairment of inventories and materials
|
(882,565)
|
|
(2,610,890)
|
|
Exchange differences
|
(3,700,660)
|
|
6,820,232
|
|
Holding gains on inventories
|
21,603,855
|
|
3,447,180
|
|
Holding (losses) on financial instruments
|
(703,214)
|
|
(4,264,403)
|
|
Effect of financial discounts on assets
|
87,540
|
|
36,756
|
|
Other
|
(1,536,944)
|
|
303,970
|
|
|
|
|
|
|
Generated by liabilities
|
|
|
|
|
|
|
|
|
|
Interest
|
(174,435,047)
|
|
(198,990,265)
|
|
Exchange differences
|
106,308
|
|
(79,031,992)
|
|
Effect of financial discounts on liabilities
|
(27,424,870)
|
|
(32,785,367)
|
|
CER restatement
|
(1,126,319)
|
|
(1,247,862)
|
|
Holding gains (losses) on financial instruments
|
2,841,208
|
|
(9,325,746)
|
|
Other
|
(1,638,964)
|
|
(2,663,407)
|
|
|
|
|
|
|
Equity in (earnings) from unconsolidated affiliates, net
|
6,153,342
|
|
7,819,626
|
|
Other expenses, net
|
(14,004,972)
|
|
(16,538,434)
|
|
|
|
|
|
|
Income before income tax, tax on assets and minority interest
|
643,346,062
|
|
293,087,604
|
|
|
|
|
|
|
Income tax and tax on assets
|
(256,163,689)
|
|
(125,959,132)
|
|
|
|
|
|
|
Minority interest
|
(110,279,694)
|
|
(44,280,352)
|
|
|
|
|
|
|
Income for the period
|
276,902,679
|
|
122,848,120
|
(1) Chargeable to:
|
Cost of sales |
(214,554,564) |
(193,850,500) |
|
Selling expenses |
(12,473,761) |
(12,460,208) |
|
Administrative expenses |
(9,423,741) |
(7,347,570) |
.
The Consolidated Statements of Operations for each business segment are included in the Financial Statements as of September 30, 2008, available at www.grupoclarin.com/ir
CONSOLIDATED STATEMENTS OF CASH FLOWs
For the nine-month periods ended September 30, 2008 and 2007
In Argentine Pesos (Ps.)
|
|
September 30, 2008
|
|
September 30, 2007
|
||||
|
CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
|
||||
|
|
|
|
|
||||
|
Income for the period
|
276,902,679
|
|
122,848,120
|
||||
|
|
|
|
|
||||
|
Income tax and tax on assets
|
256,163,689
|
|
125,959,132
|
||||
|
Accrued interest
|
159,844,072
|
|
180,348,041
|
||||
|
|
|
|
|
||||
|
Adjustments to reconcile net income for the period to cash provided by operating activities:
|
|
|
|
||||
|
Depreciation of property, plant and equipment
|
236,452,066
|
|
213,658,278
|
||||
|
Amortization of intangible and other assets
|
93,773,653
|
|
90,946,916
|
||||
|
Goodwill amortization
|
(189,758)
|
|
-
|
||||
|
Depreciation of other investments
|
111,902
|
|
107,294
|
||||
|
Setting up of allowances for doubtful accounts
|
25,868,722
|
|
16,069,271
|
||||
|
Setting up of provision for contingencies
|
20,478,897
|
|
9,022,314
|
||||
|
Exchange difference and other financial results
|
22,422,229
|
|
116,969,691
|
||||
|
Equity in earnings from unconsolidated affiliates, net
|
(6,153,342)
|
|
(7,819,626)
|
||||
|
Minority interest
|
110,279,694
|
|
44,280,352
|
||||
|
Holding (gains) losses on financial instruments
|
(2,137,994)
|
|
13,590,149
|
||||
|
Holding gains on inventories
|
(21,603,855)
|
|
(3,447,180)
|
||||
|
Losses / (Gains) on sale of property, plant and equipment
|
(1,052,718)
|
|
1,747,141
|
||||
|
Setting up of allowance for impairment in value of inventories and materials
|
882,565
|
|
2,610,890
|
||||
|
Changes in assets and liabilities:
|
|
|
|
||||
|
Trade receivables
|
(38,323,768)
|
|
(16,302,145)
|
||||
|
Other receivables
|
34,987,658
|
|
952,599
|
||||
|
Inventories
|
(54,781,034)
|
|
(39,999,613)
|
||||
|
Other assets
|
(1,541,163)
|
|
(3,023,281)
|
||||
|
Accounts payable
|
57,833,999
|
|
51,636,994
|
||||
|
Salaries and Social Security payable
|
32,342,274
|
|
19,135,130
|
||||
|
Taxes payable
|
(71,494,128)
|
|
(11,483,859)
|
||||
|
Other liabilities
|
15,802,261
|
|
(39,504,293)
|
||||
|
Provisions
|
(40,603,697)
|
|
(8,905,674)
|
||||
|
Income tax and tax on assets payments
|
(109,665,701)
|
|
(82,885,129)
|
||||
|
Cash provided by operating activities
|
996,599,202
|
|
796,511,512
|
||||
|
|
|
|
|
||||
|
CASH USED IN INVESTING ACTIVITIES
|
|
|
|
||||
|
|
|
|
|
||||
|
Acquisition of property, plant and equipment
|
(645,765,598)
|
|
(400,433,687)
|
||||
|
Acquisition of intangible assets
|
(5,355,266)
|
|
(9,112,633)
|
||||
|
Loans granted
|
-
|
|
(8,525,000)
|
||||
|
Payment for the acquisition of subsidiaries, net of cash acquired
|
(212,277,766)
|
|
(62,616,333)
|
||||
|
Collection for proceeds from sale of property, plant and equipment
|
7,887,156
|
|
5,126,118
|
||||
|
Restricted cash and guarantees
|
-
|
|
(18,960,000)
|
||||
|
Capital contributions in subsidiaries
|
(50,000)
|
|
-
|
||||
|
Collection of interest
|
5,727,859
|
|
5,275,241
|
||||
|
Collection of dividends
|
4,784,691
|
|
-
|
||||
|
Cash used in investing activities
|
(845,048,924)
|
|
(489,246,294)
|
||||
|
|
|
|
|
|
|||
CONSOLIDATED STATEMENTS OF CASH FLOWs
For the nine-month periods ended September 30, 2008 and 2007
In Argentine Pesos (Ps.)
|
September 30, 2008 |
September 30, 2007 |
||||||
|
CASH USED IN FINANCING ACTIVITIES |
|||||||
|
Loans obtained |
68,240,748 |
5,885,965 |
|||||
|
Payment of loans |
(106,732,520) |
(93,627,203) |
|||||
|
Payment of interest |
(134,970,347) |
(141,540,201) |
|||||
|
Net reimbursement of expenses related to the initial public offering |
1,484,015 |
- |
|||||
|
Net (payments) collections of financial instruments |
(429,417) |
145,482 |
|||||
|
Payment of sellers financing |
(34,190,116) |
(8,247,431) |
|||||
|
Reserve account |
(30,006,794) |
(14,931,104) |
|||||
|
Payment of dividends and restatements |
(48,000,000) |
(18,000,000) |
|||||
|
Payments to minority shareholders |
(11,999,439) |
(3,301,578) |
|||||
|
Cash used in financing activities |
(296,603,870) |
(273,616,070) |
|||||
|
FINANCING AND HOLDING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS |
6,167,283 |
12,589,853 |
|||||
|
Net (Decrease) Increase in cash flow |
(138,886,309) |
46,239,001 |
|||||
|
Cash and cash equivalents at the beginning of the year |
565,460,502 |
381,242,555 |
|||||
|
Cash and cash equivalents at period end (1) |
426,574,193 |
427,481,556 |
|||||
(1) Includes:
|
Cash and banks |
213,399,823 |
252,356,485 |
|
Investments with maturities of less than three months |
213,174,370 |
175,125,071 |
Related Shares:
GCLA.L