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* Raises 2014 core profit guidance to $85-95 million
* Q2 OIBDA jumps to $41.6 million, above expectations
* Sees return to positive free cash flow in 2015
* Shares up 10 percent, biggest gain in 5 months (Updates with guidance rise, cash flow outlook, more comments)
By Jason Hovet
PRAGUE, July 30 (Reuters) - Broadcaster Central European Media Enterprises raised its 2014 core earnings forecast on Wednesday after a rebound in the Czech advertising market gathered pace.
The company, helped by a financial lifeline from its main shareholder Time Warner, is looking to win back customers it lost last year to an aborted strategy of raising prices in the midst of a TV advertising slump.
Under new management, CME has cut prices and completed financing deals to give it breathing room - actions that co-Chief Executive Michael Del Nin said on Wednesday were starting to pay off.
CME's operating income before depreciation and amortisation (OIBDA) jumped to $41.6 million in the second quarter, beating the average estimate in a Reuters poll of analysts of $34.7 million and up from $8 million in the quarter a year earlier.
CME, which owns television stations in six central and eastern European markets, raised its guidance for 2014 OIBDA to $85-95 million from $80-90 million.
"Our results demonstrate the continuing significant improvement in the company's financial position, and provide further evidence that our turnaround is well under way," said Del Nin.
For the time being, CME's results paint a less rosy picture.
Its net loss widened to $52.5 million in the quarter, mainly related to charges on debt and interest costs and discontinued operations, according to analysts.
Still, CME shares rose the most in five months after the results and were up 10 percent at 56.50 crowns at 1358 GMT.
The company, started by U.S. billionaire Ronald Lauder two decades ago, confirmed it expected to return to positive free cash flow in 2015.
This year's cash drain was even bigger than in 2013 because of higher payments to suppliers of foreign programming after the closing of new financing deals with Time Warner.
Many of CME's customers lost last year have returned and the region's economies are growing again. Revenue rose 17 percent to $204.9 million in the second quarter mainly due to the stronger Czech business along with a rise in carriage fees in Romania.
But CME said it did not expect the pace of growth in these segments to continue for the rest of the year, and reiterated it would take a least a year for the Czech market to recover to 2012 levels. (Reporting by Jason Hovet; editing by Tom Pfeiffer)