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UPDATE 1-Poland's Cyfrowy beats Q4 net forecasts, sees TV ad market growth
February 27, 2014 / 6:40 AM / 4 years ago

UPDATE 1-Poland's Cyfrowy beats Q4 net forecasts, sees TV ad market growth

* Media group Cyfrowy Polsat posts 42 pct rise in Q4 net vs 22 pct forecast

* Sees mid single-digit growth in TV advertising this year

* Reiterates plans to pay out 100 mln zlotys in dividend this year (Adds more detail, background)

WARSAW, Feb 27 (Reuters) - New channels and higher per-user revenue in pay TV helped Poland’s biggest media group Cyfrowy Polsat report a larger than expected rise in fourth-quarter net profit, it said on Thursday.

The group, controlled by Polish billionaire Zygmunt Solorz-Zak, closed the fourth quarter - normally a windfall period in the pay TV business - with a 42 percent jump in its bottom line to 173.1 million zlotys ($57 million). Analysts expected a 22 percent rise.

Cyfrowy, which besides Poland’s largest pay-TV unit controls terrestrial broadcaster Polsat, reiterated it saw 2014 as a breakthrough year in TV advertising with a mid single-digit percentage growth pace - in line with what its main rival TVN expects.

This year will also mark Cyfrowy’s takeover of Poland’s No.3 mobile operator Polkomtel from Solorz-Zak. The mogul moved to merge his two most profitable businesses to ease their debt burden and create a group generating 10 billion zlotys in revenue.

The deal, to be completed by mid-2014, means that Cyfrowy takes on 10.2 billion zlotys of Polkomtel debt left over from Solorz-Zak’s buyout of the mobile operator in 2011, raising the joint group’s net debt to 3.1 times its core profit (EBITDA).

Cyfrowy wants to cut the ratio to 2.5 times in the coming years. It closed 2013 with EBITDA, or earnings before interest, tax, depreciation and amortisation, a notch higher year-on-year at 1.05 billion zlotys, but the EBITDA margin fell 1.3 percentage points to 35.9 percent.

In return for support from minority shareholders for the 6.15 billion zloty all-share takeover of Polkomtel, Cyfrowy said it would pay a dividend of 100 million zlotys this year, its first such payout since 2011.

$1 = 3.0499 Polish zlotys Reporting by Adrian Krajewski; Editing by John Stonestreet

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