Influential credit ratings agency Moody’s says that the outlook for Time Warner-backed CME is challenging as the advertising market will remain tough in 2013 and the impact of fixed programming costs is felt.
The Central and Eastern European broadcast group, which is 49.9% owned by Time Warner, downgraded its full-year forecasts following its recent disappointing third-quarter results announcement.
In the wake of that news Moody’s has downgraded CME and in a note on the company said that the tough regional advertising market does not look set to improve and CME’s debt to earnings ratio will increase.
“The negative outlook reflects CME’s recent announcement that it now expects its full-year 2012 reported [profit] to be in the range of US$130-to-US$140 million,” Moody’s noted.
It added: “This downward revision comes on the back of disappointing third quarter results during which the company experienced an 8% decline in revenues and a 55% decline in OIBDA in its broadcast division. This rapid deceleration in what was previously expected to be a recovering second half of the year is likely to put pressure on CME’s credit metrics.”