* Q3 net profit 172 mln zlotys, vs 132 mln forecast
* May pay dividend when net debt/EBITDA ratio falls to 2
* Ratio down to 2.18 at end-Q3
* To fare better than Polish TV ad market this year
* Shares up 2.2 percent
(Releads on dividend, adds company comment)
By Adrian Krajewski
WARSAW, Nov 14 Cyfrowy Polsat said it
was closer to resuming dividend payments after lower costs and a
stronger zloty helped Poland's biggest media group beat
quarterly earnings expectations.
Cyfrowy, controlled by Zygmunt Solorz-Zak - one of Poland's
richest men, has not paid a dividend since 2010, partly because
of debt taken on to buy TV Polsat.
The group took on 350 million euros ($445 million) debt at
the time, leaving its vulnerable to zloty/euro fluctuations.
"Cutting our net-debt-to-EBITDA ratio to 2 is a key
benchmark, which would allow us to pay dividends," chief
executive Dominik Libicki told reporters. "Theoretically, we
could pay a dividend from our 2012 profit."
With Cyfrowy paying back 200 million zlotys ($61 million)
debt in August, the ratio stood at 2.18 at end-September after
third-quarter EBITDA rose 31 percent to 258 million zlotys,
compared with a forecast for 222 million.
"We want to reach the level of 2 as soon as possible," chief
financial officer Tomasz Szelag said.
Zloty strength helped Cyfrowy cut debt costs and swing to a
net profit of 172 million zlotys, above a forecast for 132
Sales rose 4.7 percent to 644.5 million zlotys, compared
with a forecast for 640 million, after growth at the pay-TV unit
outpaced a drop in advertising revenue at Polsat, which controls
23.1 percent of the local television advertising market.
"We expect the Polish TV advertising market to shrink by 6-7
percent this year, with the fourth-quarter decline at around 8
percent," TV Polsat board member Maciej Stec said.
"On the annual basis, we want to fare better than the market
and at least in line with the market in the fourth quarter."
Cyfrowy, with a stable base of almost 3.56 million clients,
faces stronger competition at home after broadcaster TVN
and French group Vivendi agreed to combine
their Polish pay-TV operations as part of a wider partnership.
TVN and Vivendi have struggled in a crowded Polish market to
catch up with Cyfrowy, which has more clients than its two
smaller rivals combined and controls a third of the local pay-TV
market thanks to focusing on customers outside larger cities.
Analysts expected Cyfrowy to be helped by possible synergies
after Solorz-Zak completed the buyout of mobile operator
Polkomtel last year, and by the group's focus on a fast
wireless internet offer.
Cyfrowy shares were up 2.2 percent at 1315 GMT.
($1 = 3.2857 zlotys = 0.7867 euro)
(Editing by Dan Lalor and Jeremy Laurence)