April 30, 2014 / 11:36 AM / 5 years ago

Russia's CTC says complies with sanctions on big shareholder

MOSCOW, April 30 (Reuters) - Russian broadcaster CTC Media said on Wednesday it is complying with economic sanctions against the parent of a major shareholder and is studying the broader impact of the Ukraine crisis on its business.

CTC, a Nasdaq-listed company that runs three free-to-air entertainment channels in Russia, is 25 percent owned by Telcrest Investments Limited. Telcrest is controlled by Bank Rossiya, which was sanctioned by the United States over Russia’s intervention in Ukraine.

“We have implemented internal policies and procedures to ensure our compliance with applicable economic sanctions, including with respect to Telcrest ... and its designees on our Board of Directors,” the company said in a statement.

It added that it was also monitoring the situation in Ukraine, including the impact on its sublicensing revenues from its Ukrainian partners.

The developments in Ukraine, where protesters overthrew Moscow-backed President Viktor Yanukovich, Russia annexed Crimea and threw its support to separatists in eastern regions, shifted viewers to news broadcasts in March from entertainment channels.

That, coupled with a shift to state-run channels which broadcast the Sochi Winter Olympics in February, led to a decline in CTC’s audience in the quarter.

The company increased sales by 10 percent in rouble terms, ahead of the estimated growth in the overall Russian television advertising market of 7-8 percent. However, in dollar terms, revenue fell 5 percent to $186.2 million due to a weaker rouble, CTC said in the statement.

CTC also reported a 9 percent rise in first-quarter net profit to $31.2 million thanks to lower operating expenses and a decrease in its effective tax rate.

The company, in which Sweden’s Modern Times Group owns a 39 percent stake, also announced a quarterly dividend of $0.175 per share and reaffirmed plans to pay $0.70 per share in 2014 as a whole. (Reporting by Maria Kiselyova; Editing by Mark Heinrich)

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