Central European Media Enterprises Ltd. (“CME”) today announced financial results for the three and six months ended June 30, 2018.

Year-to-date operational and financial highlights:

TV advertising revenues increased 16% at actual rates and 3% at constant rates in the first half of 2018.
Carriage fees and subscription revenues increased 15% at actual rates and 4% at constant rates.
OIBDA increased 19% at actual rates and 8% at constant rates, resulting in OIBDA margin expansion to 29% from 28%.
Unlevered free cash flow for the six months ended June 30, 2018 increased 39% to US$ 89.3 million.

CME repaid a total of €160 million (approximately US$ 187 million) of debt in the first half of 2018 using proceeds from warrant exercises and cash generated by the business, which together with the improvement in our operations reduced our net leverage ratio to 4.4x at the end of June.

Following the repricing of the guarantee fees in April, our 4.1% average cost of borrowing is about 190 basis points lower than the start of the year, and will fall another 50 basis points once the net leverage is less than 4x.

On July 31, 2018, CME expects to complete the previously announced sale of its operations in Croatia to Slovenia Broadband S.a r.l., a subsidiary of United Group B.V. ("United Group"). If the sale of its operations in Croatia had closed on June 30, 2018, the repayment of debt with sale proceeds would have reduced CME’s net leverage ratio to 4.1x at the end of the second quarter. CME also previously announced on July 10, 2017 that it agreed to sell the operations in Slovenia to the United Group, and that transaction still remains subject to certain closing conditions, including receipt of Slovenian regulatory approval. These businesses are classified as held for sale and presented as discontinued operations for all periods. The discussion of results in this release relates to CME continuing operations in the four remaining operating segments.

Michael Del Nin, Co-Chief Executive Officer, commented: "Our financial performance in the second quarter was right in line with our expectations from three months ago. We also continue to expect that growth in profitability will accelerate sharply in the second half of 2018 as our businesses perform strongly across the board, leading to another full year of outstanding results and strong free cash flow generation. Combined with the significant progress that we continue to make on debt reduction, CME has reached the middle of the year in the best financial shape in a decade."

Christoph Mainusch, Co-Chief Executive Officer, added: "The results of the spring season confirm our status as market leaders and CME has long been setting high standards for content development. We have always invested in our core assets, and will continue to strengthen our programming line-up with new formats in addition to local favorites. We expect television will remain a cornerstone of building awareness for existing brands and new product launches, and we will continue to expand our offering with complementary assets to improve the reach we provide for advertisers and diversify our revenues."