Press releases | Archive 2011
RBC reports Q1 2011 financial results: advertising revenue up 47%
Key financial and operating results:
- RBC’s total revenue increases 31% to RUB 853m;
- Advertising revenue goes up 47% to RUB 618m;
- RBC boosts its Internet audience 22% year-on-year to 56m1 users as of the end of March;
- RBC TV’s audience in Russia hits a historic high of 17.7m viewers in February;
- RBC raises the prices of advertisement placement on its Internet resources by an average 18%; the cost of commercial placement on RBC TV increases 15%2;
- The company is considering leveling prices up again starting from September;
- RBC reaches an agreement to buy the largest professional domain name registrar and one of Russia’s leading hosting providers RU-CENTER;
- RBC launches the construction of a new studio complex for RBC TV;
- RBC starts exchanging shares of RBC Information Systems for the shares of RBC: 87% of shares were exchanged as of the beginning of May;
- The shares of RBC Information Systems will be delisted before the end of May.
Moscow, May 25, 2011 — Today RBC OJSC (RTS, MICEX: RBCM) announces today its unaudited consolidated financial results for the first quarter of 2011.
“RBC’s consolidated revenue increased more than 30% in the first quarter. Total advertising revenue across all three business segments rose 47% in the reporting period. This is a very strong result given that the first three months of the year are traditionally the weakest in terms of advertising sales,” RBC CEO German Kaplun said.
“Taking a conservative approach, the company will not revise its 2011 forecast despite the fact that RBC’s business has been growing at a faster pace than expected since the beginning of the year. If the trend seen in early 2011 continues in the remaining months, RBC could outperform its forecast for this year,” German Kaplun added.
Breakdown of the company’s revenue in the first quarter of 2011
|RUB million||Q1 20113||Q1 20103||Change (%)|
|- Business titles5||85||43||98%|
|- Salon Press||129||121||7%|
Revenue and EBITDA. RBC’s total revenue rose 31% in the first quarter of 2011 compared to the same period of 2010, reaching RUB 853m. Revenue from advertisement placement on RBC’s Internet resources, RBC TV television channel and in the company’s print media titles increased 47%. The increase in the revenue was due to further expansion of the company’s audience, higher sell-out ratio of RBC’s media resources and raised advertising prices. It also reflects the positive development trends of the Russian advertising market, which grew 28%6 in the first quarter.
RBC’s EBITDA was close to the break-even point and amounted to -88m rubles. The negative figure is attributable to a seasonal factor in the advertising business where the bulk of the profit is generated in the second half of the year.
Internet. Internet revenue increased 27% in the first quarter of 2011 compared to the same period of 2010, reaching RUB 525m. This growth is due to a further expansion of RBC’s Internet audience and an average 18% increase in the price for advertisement placement on the company’s Internet resources.
Total Internet audience of RBC reached 56m users as of the end of the first quarter, up 22% year-on-year. All of RBC’s key resources showed a considerable growth. RBC remains the fourth largest player on the Russian Internet market in terms of the Russian audience, which stood at 20.4m users in March.
The audience of Rbc.ru business portal increased 39% year-on-year to 18.2m users as of the end of March 2011. The portal remains the undisputed leader in the business information segment. The audience of Rbcdaily.ru surged 51% in the same period to 3m users. RBC Daily ranks second among business dailies in terms of the Russian Internet audience (2.4m readers).
The number of users of RBC’s non-business resources went up 33% year-on-year to 51.4m in March, primarily thanks to a 65% increase in the audience of Qip.ru portal. Qip.ru has evolved into a portal that offers its users advanced means of communications, entertainment services and topical information. It has a monthly audience of 18.9m users. A new version of QIP Internet messenger, integrated with the services of international social network Facebook, was rolled out in the reporting period.
In March, RBC announced an agreement with Regional Network Information Center on the acquisition of professional domain name registrar and one of Russia’s leading hosting providers RU-CENTER. Regional Network Information Center will become the sixth business unit of Hosting Community Group, which is part of RBC holding. The management expects the consolidation to produce a strong synergetic effect owing to an increase in the profitability of both companies and strengthening of their leadership positions on the market for hosting and domain services.
Television. RBC TV’s revenue soared 58% to RUB 114m in the first quarter of the year. The channel’s increase in revenue outperformed the market average (29% according to RACA), which is primarily attributable to RBC TV’s improved ratings and a 15% rise in the cost of placing advertisements on the channel as a result of a decrease in discounts. Furthermore, the sell-out ratio of RBC TV continued to grow.
In February, RBC TV’s audience reached the record-high of 17.7m viewers. The channel’s audience increased 11% to 17.5m viewers year-on-year as of the end of the first quarter.
In order to further expand its audience, RBC TV launched a series of programs hosted by famous economists: Viktor Gerashchenko, Mikhail Khazin, and Sergey Aleksashenko. RBC has also started the construction of a new contemporary studio complex for RBC TV, which is scheduled to become operational during the fall of 2011. This will allow the company to reach a new level of on-air presence and organization and expand the channel’s capacity for creating new interactive programs.
Print media. The revenue of RBC’s print media titles rose 30% to RUB 214m in the first quarter. Similarly to 2010, RBC’s business titles contributed the most to the increase in the amount of sales, as their revenue nearly doubled (98% rise) to RUB 85m in the reporting period. The increase was driven by high ratings of RBC’s titles. Specifically, the RBC Daily newspaper is ranked among the top three most popular business newspapers in Moscow, while RBC magazine is one of the two leading business titles in Russia. The rise in revenue was also affected by the strengthening of the team of journalists and advertising sales managers who specialize in print media, which resulted in the further growth of the sell-out ratio of business titles. Moreover, additional revenue was generated by a 10% increase in the price of advertisements placement in the fourth quarter of 2010.
Idei Vashego Doma (Ideas for Your Home) and Salon Interior magazines also retained their leading positions in the Russian segment of interior design publications. Despite the high ratings of its key magazines, revenue from Salon Press Publishing House rose 7% year-on-year in the first quarter of 2011 as a result of the still slow recovery of the Russian residential real estate market from the economic downturn.
Share exchange. In January 2011, RBC began accepting applications for the exchange of 100% of shares of RBC Information Systems OJSC for 49% in RBC OJSC. The share exchange is carried out with the ratio of 1.116 shares of RBC OJSC for 1 share of RBC Information Systems OJSC. As of May 11, 87% of the shares of RBC Information Systems OJSC had been exchanged for shares of RBC OJSC. The shares of RBC Information Systems OJSC will be delisted from stock exchanges by the end of May. RBC OJSC will, therefore, remain the only public company representing the RBC holding, starting from June 2011.
Outlook for 2011. RBC confirms its 2011 forecast: the rise in consolidated revenue is estimated at about 30% in 2011. The biggest increase of revenue is expected in the Internet segment. Company’s expenses are projected to grow moderately.
Cautionary note regarding forward-looking statements
Some of the information in this press release may contain statements of future expectations and other forward-looking statements. These expectations are based on the management's current views and assumptions, and involve known and unknown risks and uncertainties. It is possible that the company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the company's future results, see “Risk Factors” in the company’s latest Annual Report on www.rbcholding.com. RBC assumes no obligation to update any forward-looking information contained in this document.
- 1 According to TNS
- 2 An increase in the cost of placing advertisements on RBC TV resulted from a 15% reduction in discounts
- 3 Financial results are based on management accounts prepared in accordance with IFRS (unaudited)
- 4 Internet advertising, services and marketing communications
- 5 Business titles include the RBC Daily newspaper, as well as the RBC, Nashi Dengi and CNews magazines
- 6 According to Russian Association of Communication Agencies (RACA)