(For other news from the Reuters Media Summit, click on
http://www.reuters.com/summit/Media08?pid=500)
(Adds details, quotes)
By Kate Holton and Georgina Prodhan
LONDON, Dec 1 (Reuters) - Television broadcaster Central
European Media Enterprises <><CETV.O> (CME) is
preparing for a slowdown in the rate of growth but not a decline
in six of its seven markets, its chief executive said on Monday.
The group, which reaches about 100 million viewers in seven
central and east European countries, is also not looking for any
further expansion at the moment as it does not see any
opportunities, Michael Garin told Reuters.
"We are preparing for a slowdown in the rate of growth, but
not a decline in six of the seven, and Ukraine is unknown,"
Garin said at a London session of the Reuters Media Summit.
"In the current environment, I just don't see any (M&A)
opportunities that we'd be prepared to do right now. Equity is
too expensive to raise, debt is impossible to obtain.
"Our target is to maintain a minimum liquidity cushion of
200 million dollars. So I wouldn't want to jeopardise that.
"In a time like this, my mission is to really ensure the
long-term financial health of the company and M&A is not the
route to achieve that."
CME reported last month that its third-quarter net loss
shrank by 21 percent but the operating figure plunged 78 percent
to $6.1 million.
The Czech broadcaster did not give an explanation for the
big drop in operating income but Garin said the company should
not be judged on one quarter's performance but over the full
year, which would hit forecasts.
For 2009 he said the Czech Republic would see significant
revenue growth and the company would see growth in five other
markets.
CME had previously cut its earnings forecast due to the
strengthening dollar but said local currency guidance remained
unchanged.
"The only country where there is an uncertain market ...
with no visibility, is Ukraine," he said. "I think all of our
other countries will have growth, some single digit but many
double digit."
Garin said the company had appointed new management in
Ukraine and taken full control of the business and was seeing
results "a lot sooner than we dared hope".
Garin also said, due to its good visibility, CME could
control its earnings and cash preservation by reducing its
capital expenditure if needed.
"Our strategy, especially at a time like this, is to manage
EBITDA maximisation and cash preservation, so we will be
announcing soon our capex commitments for next year which will
be significantly below what we've indicated earlier," he said.
"The kind of things we're deferring we can afford to defer
without significantly impacting our businesses, (such as)
building a new studio or facility in Ukraine, shifting to high
definition broadcasting in the countries where we're not
already."
CME operates in the Czech Republic, Romania, Slovakia,
Slovenia, Ukraine, Croatia and Bulgaria.
Garin said Turkey could be interesting but its media and
broadcasting market was too disorganised and that Russia was "a
very difficult place to do business". He said they were not
interested in expansion in Africa.
Advertising sales account for almost all the group's
revenues and Garin said CME's markets had not seen the slowdown
witnessed in some other markets because the majority of its
advertising was for basic products, such as soap, beer and
shampoo which was still used during a downturn.
(Additional reporting by Paul Sandle; Editing by David Cowell)
