* CME cuts 2010 guidance on lower ad sales outlook
* Q2 revenue up 10 pct to $201.7 mln vs $190.2 mln in poll
* Net profit $165.2 mln due to Ukraine sale
* Shares <CETV.O> <> lose 4.4 percent
(Updates with lower guidance, comments)
By Jason Hovet
PRAGUE, July 28 (Reuters) - Central European Media
Enterprises (CME) cut its 2010 guidance on Wednesday due to a
worse outlook for spending on TV advertising in its markets,
sending shares down more than 4 percent.
CME, partly owned by Time Warner <TWX.N> and U.S. investor
Ronald Lauder, has battled a sharp decline in television
advertising spending in its once-booming central and eastern
European markets.
The broadcaster expects ad spending to drop on average 3
percent in its six markets for all of 2010, a lower forecast
than flat growth seen in April. CME also said weaker local
currencies in dollar terms would impact its 2010 earnings.
As a result, it cut its revenue outlook to $710 million to
$725 million, from previous guidance of at least $790 million
and compared to $714 million in 2009.
Core profit, as measured by operating income before
depreciation and amortisation (OIBDA), is seen at $100 million
to $115 million, cut from $140 million to $160 million but
higher than $75 million in 2009.
Shares fell from gains after the guidance was released and
traded down 4.4 percent just before the Prague close,
underperforming a 0.4 percent fall in the main index <>.
"TV add spending in 2010 did not match our expectations for
recovery. Therefore, the whole year will be challenging," Chief
Executive Adrian Sarbu said in a conference call.
"Overall, the second half of the year will show positive
trends, but the take-off will be slow."
VARIED RECOVERY
Market recovery started in the Czech Republic and Slovenia
in the second quarter, and will begin in the second half in
Slovakia and Croatia, CME said.
Ad spending in the Czech Republic should recover by around 9
percent in the second half, but fall by 12 percent in Bulgaria.
The company reported on Wednesday second-quarter revenue
above expectations with a 10.3 percent rise to $201.7 million --
helped by the $413 million acquisition of Bulgaria's bTV which
offset the drop in TV ad spending.
OIBDA -- equivalent to earnings before interest, tax,
depreciation and amortisation (EBITDA) -- was up a touch at
$46.2 million, beating $42.4 million seen in a Reuters poll.
A $217.6 million gain from the sale of Ukrainian operations
during the quarter stopped CME from falling to a loss. It had a
net profit of $165.2 million, up from $24.1 million a year ago.
CME said ad spending would not return to pre-crisis levels
until 2013. Its shares have lost 6 percent this year, while
Prague's PX index has gained 6 percent.
(Editing by Jon Loades-Carter)
