Spanish Broadcasting System (SBS) on August 7 offered a peek at what it expected to report in its Q2 2018 earnings.
SBS has now delivered on that report. Did the results match its forecast?
Consolidated net revenue improved by 2%, to $34.8 million from $34.2 million.
This was fueled by SBS’s Mega TV operation, however — SBS’s radio revenue in Q2 2018 was exactly the same as was reported in Q2 2017, holding steady at $31,279,000.
For the TV division, revenue jumped to $3.5 million, from $2.9 million.
But, adjusted OIBDA for radio improved by 30% year-over-year, to $13.9 million. Overall, adjusted OIBDA increased by 44%, to $11.6 million.
The consolidated net revenue results met the high end of SBS’s forecast.
Adjusted OIBDA, which excludes non-cash stock-based compensation, also came in at the high end of expectations.
Operating income came in at the high end of SBS’s forecast, too, finishing at $9.1 million — down from $16.5 million in Q2 2017.
“This decrease was primarily due to having recognized a gain on the sale of our Los Angeles facility in the prior year and impairing an FCC broadcasting license in the current year partially offset by the increase in net revenues, the decrease in operating expenses and recapitalization costs,” SBS explained.
This led SBS to swing to a consolidated net loss of $2 million (-27 cents per diluted share) from net income of $2.57 million (35 cents) in the quarter. A $12.8 million gain on the disposal of assets, net of disposal costs, is the contributing factor here.
Why did SBS’s radio segment see flat net revenue?
Increases in network and local revenue were offset by decreases in barter, special events, national and digital sales.
SBS’s local radio sales increased in Los Angeles, Puerto Rico, Miami and San Francisco markets, as national sales increased in its Los Angeles, Puerto Rico, and San Francisco markets.
For Mega TV, increases in local and subscriber-based revenues and hurricane related insurance proceeds for business interruption in Puerto Rico attributed to the growth.
“Our second quarter results marked a continuation of our solid financial and operating performance as we built upon the momentum in our business,” said SBS Chairman/CEO Raúl Alarcón Jr.. “Our top-line growth was supported by a continued focus on actively managing our costs which were down significantly compared to last year and helped drive healthy margin expansion. We have built a multi-platform leadership position serving the needs of Latinos nationwide and connecting brands with highly attractive demographic groups. Moving forward, we will remain focused on advancing our multi-platform strategy while driving improved performance.”