Boston, MA 10/31/2013 (wallstreetpr) – Central European Media Enterprises Ltd. (NASDAQ:CETV) is looking for more financing to stay afloat. The company declared its third quarter results yesterday and they were better than expectations. Third quarter loss was lower at $23.3 million as compared to $32.64 million for the same period last year. Earnings per shares translated to a negative $0.16 as compared to negative $0.36 for last year. There was a decrease in pre-tax loss from $33.26 million to $25.25 million. Revenues also took a hit, reducing to $135.84 million as compared to $140.10 million for the third quarter of last year. The company revised downwards its outlook for the complete year in revenues to be between $640 million and $650 million. CME has been facing losing market share in its key market of Czech Republic after the company tried to raise prices. This move benefitted its closest rival, Prima, owned by Sweden’s Modern Times Group. The company has forecasted that it would not be able to revive revenues even in 2014. CME also operates television stations in Romania, Bulgaria, Slovenia and Croatia. The Czech Republic contributes to a third of its revenues. The company’s woes have been growing stronger after the exit of its Chief Executive.
With negative cash flows of $140 million expected for the full year, CME is in very dire straits. It needs additional funds immediately. In case, the company is not able to source these funds, it will default on its loan obligations and may have to close down at least some services as early as next year. The company is exploring all options including asset sales, debt and equity financing. CME has also approached its largest shareholder Time Warner Inc. (NYSE:TWX) for funds. Time Warner already owns 49.9% of the company and may not be in the mood to lend money to its partner this time around. Time Warner has already injected funds in 2012 after buying into the company in 2009. Time Warner followed it up by buying half of a share issue in 2013 worth $200 million.
Time Warner will not find it easy to walk away after investing so much money into CME. Investors are also getting jittery and have dumped the stock. The shares were trading at $2.82, down by 53.85%. However, they have recovered slightly in pre-market trading and are available at $2.97 per share, a rise of more than 5%.
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