CTC MEDIA REPORTS SECOND QUARTER 2007 FINANCIAL RESULTS

30.07.2007
Moscow, Russia – July 30, 2007 – CTC Media, Inc. (NASDAQ: CTCM), a leading television broadcaster in Russia, today reported financial results for the three- and six-month periods ended June 30, 2007.

- Consolidated Revenue Increases 9.1% to $112.1 Million -
- OIBDA* of $51.4 Million -
- Net Income of $30.7 Million, $0.19 Earnings Per Share -

US$ 000's, except per share data

Three months ended
June 30,




Six months ended
June 30,



 

2006

2007


Change


2006

2007


Change

 
 
 
 
 
 
 
 
 
 

Total operating revenues

$102,758

$112,147

 

9.1%

 

$181,981

$216,268

 

18.8%

Total operating expenses

(53,549)

(66,853)

 

24.8%

 

(99,704)

(132,458)

 

32.9%

 
 
 
 
 
 
 
 
 
 

OIBDA*

54,392

51,422

 

(5.5)%

 

91,198

95,710

 

4.9%

 
 
 
 
 
 
 
 
 
 

Net income

$34,110

$30,692

 

(10.0)%

 

$56,765

$58,815

 

3.6%

Earnings per share

$0.23

$0.19

 

(17.4)%

 

$0.38

$0.37

 

(2.6)%

*OIBDA is defined as operating income before depreciation and amortization (exclusive of amortization of programming rights and sublicensing rights). OIBDA is a non-GAAP financial measure. Please refer to Attachment A for a reconciliation of OIBDA to net income.

Financial Highlights
• Consolidated revenue increased 9% to $112.1 million in the second quarter and 19% to $216.3 million in the first six months of 2007
• OIBDA declined 6% to $51.4 million in the second quarter and increased 5% to $95.7 million in the first six months of 2007
• Net income declined 10% to $30.7 million in the second quarter and increased 4% to $58.8 million in the first six months of 2007
• $0.19 and $0.37 fully diluted earnings per share for the three- and six-month periods ended June 30, 2007

Corporate Highlights
• CTC Network audience share was 8.9% in the second quarter of 2007 compared to 9.3% in the first quarter of 2007 and 11.7% in the second quarter of 2006 (which was an all-time quarterly record for CTC largely due to the mega-hit series, Born Not Pretty)
• Domashny Network audience share was 2.0% in the second quarter of 2007 compared to 1.9% in the first quarter of 2007 and significantly higher than 1.3% in the second quarter of 2006
• Further strengthened portfolio of owned-and-operated stations by adding three stations in important new markets: Domashny station in the strategic city of Vladivostok, and, in July, CTC and Domashny stations in Irkutsk
• Acquired the remaining 50% interest in our successful CTC TV Station in Kazan

Alexander Rodnyansky, Chief Executive Officer, stated, “The Russian television market remains robust and CTC continues to build upon its brands and unique market position as we target the younger audiences coveted by advertisers. In the second quarter we faced difficult comparisons from the year ago period in which revenue increased 83% and OIBDA improved 106% driven by the conclusion of our mega-hit Born Not Pretty and a surge in spot advertising demand in advance of new advertising regulations which were implemented on July 1, 2006. Nonetheless, in the quarter we grew our top-line and maintained impressive OIBDA and net income margins of 46% and 27%, respectively.

“We continue to build our presence in key local markets in Russia, strengthening Domashny’s technical penetration and at the same time expanding our access to the larger local growth markets. Also, we successfully acquired the remaining interest in our CTC station in Kazan, one of our more successful stations, which will allow us to fully consolidate the value of our programming in this important market.

“Audience share results at CTC Network came in lower than our internal expectations. This was partially offset by another strong performance of our Domashny Network which grew audience share to 2.0%, an increase of 54%, from 1.3% in the second quarter of 2006, and generated positive OIBDA for the third consecutive quarter. As we look to the important fall 2007 programming season we remain focused on building upon our audience shares. We have scheduled a record number of premieres for CTC Network, based on successful foreign and Russian formats, and expect the positive momentum at Domashny to continue as we expand our audience reach and improve programming.

“While the third quarter is historically the smallest for ratings and revenue as a result of the summer season, we are optimistic about our innovative programming schedule for the coming fall season, which will feature our highly successful Russian series Cadets, a Sci-Fi drama series Heroes and original Russian shows based on formats such as American Idol and Are You Smarter Than A Fifth Grader?”

Results for the Three Months Ended June 30, 2007
CTC Media’s total operating revenue for the three months ended June 30, 2007, increased 9.1% to $112.1 million from $102.8 million for the three months ended June 30, 2006. The revenue growth reflects the continued growth of the Russian television advertising market, which partially offset difficult comparisons from the year ago period in which revenue increased 83% primarily driven by the performance of the Company’s flagship CTC Network. Revenues were also favorably impacted by the significantly lower commission rate paid by our owned-and-operated stations to Video International in the second quarter of 2007 in connection with the variable commission rate negotiated through 2007.

CTC Network’s audience share was 8.9% for the second quarter of 2007. CTC remains the fourth most watched broadcaster in Russia overall. Domashny’s audience share grew from 1.3% for the three months ended June 30, 2006, to 2.0% for the three months ended June 30, 2007. As a result, CTC Media’s combined audience share was 10.9% in the second quarter of 2007 as compared to a record 13.0% in the second quarter of 2006.

Consolidated total operating expenses in the second quarter of 2007 increased by 24.8% to $66.9 million, in line with expectations and compared to $53.5 million in the second quarter of 2006. The increase in total operating expenses in absolute terms was primarily driven by an increase in amortization of programming and sublicensing rights expenses, and increases in selling, general and administrative costs, that included $3.5 million of stock-based compensation expense and increased promotional costs.

OIBDA decreased 5.5% to $51.4 million for the second quarter of 2007 compared to $54.4 million, or an increase of 106%, in the second quarter of 2006. The OIBDA margin was a strong 45.9%, although down from 52.9% in the second quarter of 2006.

Operating income for the quarter was $45.3 million compared with $49.2 million for the three months ended June 30, 2006, a 8.0% decrease. Operating income as a percentage of total operating revenue was a strong 40.4% in the second quarter of 2007, although down from 47.9% in the second quarter of 2006. Net income for the quarter was $30.7 million compared to $34.1 million for the three months ended June 30, 2006. Fully diluted income per share was $0.19 for the three months ended June 30, 2007, compared to $0.23 for the three months ended June 30, 2006.

Results for the Six Months Ended June 30, 2007
CTC Media’s total operating revenue for the six months ended June 30, 2007, increased by 18.8% to $216.3 million from $182.0 million for the six months ended June 30, 2006.

Consolidated total operating expenses for the first six months of 2007 increased by 32.9% to $132.5 million compared to $99.7 million for the first six months of 2006.

OIBDA increased 4.9% to $95.7 million for the first six months of 2007 compared to $91.2 million for the first six months of 2006. OIBDA margin for the six-month period was a strong 44.3%, although down from 50.1% in the first six months of 2006.

Operating income for the first six months of 2007 was $83.8 million compared with $82.3 million for the first six months of 2006, an increase of 1.9%. Operating income as a percentage of total operating revenue was a strong 38.8% for the first six months of 2007, although down from 45.2% in the first six months of 2006.

Net income for the six months ended June 30, 2007 was $58.8 million compared to $56.8 million for the six months ended June 30, 2006. Fully diluted income per share was $0.37 for the six months ended June 30, 2007, compared to $0.38 for the six months ended June 30, 2006.

Guidance
For the full year ending December 31, 2007, the Company reconfirms its guidance for consolidated total operating revenue in the range of $460 to $500 million, with a consolidated OIBDA margin in the range of 45-48%.

Conference Call
The Company will also host a conference call to discuss its second quarter 2007 financial results today, Monday, July 30, at 9 a.m. ET, corresponding to 5 p.m. Moscow time. To access the conference call, please dial +1 973 582 2741 (international) or 8108 002 531 1012 (Russia) and reference pass code 8982560. A live webcast of the conference call will also be available on the investor relations portion of the Company's corporate web site, located at www.ctcmedia.ru. A replay of the conference call will be available through Monday, August 13, 2007, at midnight ET. The replay can be accessed by dialing +1 973 341 3080. The pass code for the replay is 8982560. The webcast will also be archived on the Company’s web site for two weeks.

About CTC Media, Inc.
Based in Moscow, CTC Media, Inc. was formed in 1989 to pursue commercial media and advertising opportunities in Russia. The Company owns and operates the CTC television network, whose signal is carried by more than 340 affiliate stations, including 18 owned-and-operated stations; and the Domashny television network, whose signal is carried by over 220 affiliate stations, including ten owned and operated stations. The Company is traded on the NASDAQ Global Select Market under the symbol: "CTCM". For more information on CTC Media, please visit: www.ctcmedia.ru.

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Contacts:
CTC Media, Inc.
Dmitry Barsukov, Katya Ostrova (investors)
+ 7 495 783 3650
ir@ctcmedia.ru

Konstantin Vorontsov (media)
+ 7 495 785 6333

Brainerd Communicators, Inc.
Jenna Focarino (media)
Michael Smargiassi (investors)
+1 212 986 6667

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