RBC upgrades year-end revenue outlook in Media and IT Services to $39m
Consolidated key figures
Three quarter 2003 results
| $'000 |
1-3 quarters 20031 |
1-3 quarters 20021 |
% Change |
| Total revenue |
26 285 |
18 467 |
42 |
| Media revenue |
15 016 |
8 638 |
74 |
| IT revenue |
11 269 |
9 829 |
15 |
|
1 - Unaudited data calculated on the basis of the management accounts of RBC Group of Companies in accordance with IAS.
Moscow, October 30, 2003 - Commenting on the preliminary results of RBC Information Systems (RTS, MICEX: RBCI) for the first three quarters of 2003, which were made public today, RBC Chairman and CEO German Kaplun said: "I am pleased with our excellent results as our business continued to deliver double-digit revenue growth. For the remainder of the year, we upgrade our sales forecast and are convinced that RBC will meet its objectives operationally and financially in the core businesses for the full year 2003."
Revenue
Continuing healthy volume gains in Media Services and accelerated growth in IT Services lifted RBC three-quarter revenues 42% from $18.5m in 2002 to $26.3m this year. In the total revenue mix of the company, the media business accounted for 57%, with the rest coming from IT Services.
Media Services
The Media business of the company posted a significant growth of 74% and reached over $15m in the first three quarters of 2003 as compared to $8.6m in the similar period of the previous year. The launch of RBC TV coupled with a large-scale advertising and marketing campaign brought about a new wave of interest to RBC media services, which eventually resulted in bigger Internet advertising budgets allocated for RBC. To take advantage of cross-selling opportunities provided by RBC TV, the company restructured its media planning processes and started offering comprehensive advertising packages to its clients. Additionally, driven by strong brand recognition and overall media market growth, the company increased the number of clients, who use RBC as an advertising agency.
The start of RBC TV broadcasting also gave access to a new type of clients, such as oil and gas companies, and positioned RBC to expand its traditional client base, including financial organizations, real estate developers and automotive producers.
Growth in the information services segment of the company was fueled by recent additions to RBC's product mix, such as marketing research and the Quote Total information terminal. These are more expensive products, which performed extremely well in the past quarter and substantially lifted the company's average subscription charge per user.
Despite a moderate growth in the monthly audience of RBC's resources, readers visited a greater number of online pages and the share of daily repeat users among RBC's business audience significantly rose. This enabled the company to increase its advertising inventory by 20% and improve advertising capacity utilization.
IT Services
As anticipated, the inflow of revenues from the IT business accelerated and reached 15%, rising from $9.8m in the first three quarters of 2002 to $11.3m in the period under review. As a result, the contribution of IT Services in the general revenue mix rose from 39% in the first six months of 2003 to 43% in the third quarter. The top-line growth was mainly driven by an increased number of programming contracts with state organizations. Additionally, in the area of offshore programming healthy revenue streams came from the growing demand of CIS clients for business automation systems.
RBC management expects the revenue growth in IT Services to continue and yield at least a 25% growth by the end of the year, as the completion of a large number of current IT projects falls due on the fourth quarter of 2003.
Outlook 2003
In view of the ongoing media and IT growth, RBC management upgrades its 2003 outlook to $39m in total revenues from the core businesses, which represents a 34% increase as compared to the previous year. This forecast is based on existing contracts, the continuing dynamic performance of RBC's flagship brands and implementation of new projects. It does not include revenues from RBC TV. The company will continue to actively develop its television project and will be in a position to announce RBC TV’s first results in three months after the launch, i.e. in December 2003.
Cautionary note regarding forward-looking statements
Some of the information in this press release may contain statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. It is possible that the company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the firm's future results, see "Risk Factors" in the company's IPO Circular on www.rbcinfosystems.com. RBC assumes no obligation to update any forward-looking information contained in this document.
Investor contact: Natalia Makeeva
Tel: +7 (495) 363-1111 (ext. 1369), e-mail: ir@rbc.ru, Web: www.rbcinfosystems.com.
