Consolidated operating revenue “STS Media” in 2015 amounted to $350,56 million, a decrease of 50.7% compared to the previous year. In 2014, the company reported revenue of $710.4 million this is stated in its annual report published on the NASDAQ (“CTC Media” is traded on the new York stock exchange since 2006).
In RUR total revenue media in 2015 was reduced by 24% and advertising revenue by 20%. Operating profit of the holding in dollars fell by 97% to c $was 157.9 million in 2014 to $4.6 million.
The net loss of the holding at the end of last year amounted to $487 million, while in 2014 he showed a profit of $109 million for This loss, stated in the accounts reflects the company’s losses from the sale of 75% of the operating business of the holding company UTH Russia. “STS Media” has classified its assets as discontinued operations in connection with the sale of the holding UTH Russia.
The company also explain the poor financial performance the decline of TV advertising market in 2015, according to the Association of communication agencies of Russia (AKAR), advertising sales on the Russian TV last year decreased by 14%.
In addition, the “CTC Media” indicate a decline in the share of the main channel of the holding — STS: in 2015 the target audience is 10-45 years she declined to 8.2 c 10.2% in 2014. The share of other major Federal channels also fell, noted in reporting: the share of channel one in the audience 10-45 years has decreased from 12.1 to 11.5%, TNT — from 13 to 12.8%, and NTV from 7.8 to 6.7%. However, the channel STS has shown the biggest decline among major channels.
The share of the other two channels of holding “STS Media” — the “Home” and CTC Love has grown. In “Home” (in the target audience among women 25-59 yrs years) it went up to 3.6 from 3.3%, and CTC Love — to-1 with 0.6% (in the target audience all the audience of 11 to 34 years). TV channel “Pepper” was restarted in the fall of 2015, now it is called “Che”. Its share declined from 2.1% in 2014 to 1.9% (the audience all 25-49).
In September 2015 “STS Media” has officially announced that signs definitive agreement to sell 75% of their operating business holding UTH Russia Alisher Usmanov and Ivan Tavrina. The transaction was closed in December.
The deal allowed “CTC Media” to meet the new requirements of the law “On mass media”, which from 2016 prohibits foreigners from owning more than 20% in the founder of any Russian media. Up to this point, almost 38.6% of head “STS Media”, registered in the U.S., was owned by Swedish Modern Times Group (MTG), 36,07% of the shares were traded on NASDAQ, the remaining 25,4% by Cyprus Telcrest associated with the Bank “Russia” Yury Kovalchuk.
The transaction was structured in two stages. First American’s parent company CTC Media Inc. sold 75% of actions “STS investments” (which recorded an operating business of the company) holding UTH Russia. In February 2016 UTV has paid all funds owed to the shareholders “STS Media” — the total amount for 75% of the operating business amounted to $193 million. Now the “CTC Media” shall allocate these funds as well as own cash in the amount of about $248 million among selling shareholders.
The second step will be the withdrawal from the exchange — as stated in the financial statements, the holding company plans to make it to the end of the second quarter of 2015. In March he received permission to repurchase the shares of the parent company CTC Media MTG and minority shareholders from the office of foreign assets control (Office of Foreign Assets Control, OFAC) of the U.S. Treasury that will allow him to leave NASDAQ.