Achieved Profitable Growth and Net Profit Margin Expansion
HONG KONG, Jan. 31, 2013 /PRNewswire/ --
* Included in the 2011 business activities were sales generated by the Group's Shenzhen bus body advertising business, an operation which was terminated in December 2011.
Clear Media Limited ("Clear Media" or the "Group"; SEHK Stock Code: 100), the leading outdoor advertising company in China listed on The Stock Exchange of Hong Kong, is pleased to announce its annual results for the year ended 31 December 2012.
Leveraging Clear Media's leading market position, high-quality assets and efforts from the Group's management team, it saw its core bus shelter advertising revenue increased by 11.8% to HK$1,522 million in 2012, from HK$1,361 million in 2011, amid a tough environment.
Including effects of sales generated by Shenzhen bus body advertising business, an operation which was terminated in December 2011, the Group's total turnover increased by 2.4% year on year.
The Group's earnings before interest, tax, depreciation and amortisation ("EBITDA") for the year under review increased 13.1% to HK$619 million, mainly due to higher turnover of the core bus shelter advertising business and termination of the Shenzhen bus body advertising business in the current period. Net profit increased by 16.9% to HK$219 million for the year ended 31 December 2012 on the back of the increase in the turnover of the core bus shelter advertising business and the increase in bank interest income, while the net profit margin widened to 14.4% (2011: 12.6%). The Directors proposed a final dividend of HK15 cents per share (2011: HK 5 cents).
"2012 was the last year of Clear Media's three-year development plan and the Group has achieved all goals laid out in the plan. Meanwhile, we managed to add more than 2,000 panels to our bus shelter network, an achievement that reinforced our leading position in China's nationwide, standardized bus shelter advertising network. We also secured new orders from certain renowned international brands as more advertisers were increasingly convinced about the effectiveness of our bus shelter advertising platform which remained as an important part of their outdoor advertising budgets," said Mr. Mark Thewlis, Executive Chairman of the Group.
At the end of 2012, Clear Media operated approximately 37,000 panels (2011: 35,000 panels) covering 28 cities in China, an exposure that made Clear Media the most scalable bus shelter advertising operator in the country. The adjustment to the Group's 2012 advertising rate card was relatively high when compared with those made in recent years. Accordingly, the ASP increased by 14% in 2012. The overall occupancy rate softened to 59% (2011: 66%) mainly as a result of the challenging operating environment, a 9% increase in average number of panels and a relatively steep increase in ASP.
During the year under review, Beverages, Telecommunications and Entertainment were the top three industries, accounting for about 44% of the Group's turnover. The slowdown in the movie industry, ahead of the 18th CPC National Congress which took place in November, affected the advertising revenue contribution from the entertainment sector. Since September, Japanese brands appeared to have significantly reduced their advertising spend amid the tension between China and Japan. With domestic consumption in Mainland China continued to expand during the year, the Group secured new orders from certain renowned international brands with revenue gains offsetting the decline in sales to some of the key customers. Accordingly, the Group managed to grow its bus shelter advertising revenue by 11.8% despite the multitude of unfavorable factors.
For the year ended 31 December 2012, sales in the top three cities -- Beijing, Shanghai and Guangzhou -- increased by 14.1% to HK$852 million (2011: HK$747 million) and accounted for 56% of total sales of the core bus shelter business (2011: 55%).
Beijing performed well with a 20% increase in advertising revenue. Shanghai demonstrated marked improvement in revenue performance with a 10% increase in sales in 2012, compared to the 4% decline in 2011. Among the three top-tier cities, Beijing was the best performing. Revenue from Beijing increased by 20% to HK$427 million (2011: HK$357 million) mainly due to an increase in bus shelter panels and a 17% increase in ASP. The average number of bus shelter panels increased by 11% following the acquisition of concession rights to operate about 700 bus shelter panels in Beijing. On the back of the challenging operating environment, the increase in bus shelter panels and the relatively high increase in ASP, the occupancy rate softened to 65% (2011: 70%).
There was marked improvement in the revenue performance in Shanghai during the year. Revenue from Shanghai increased by 10% to HK$186 million while the ASP increased by 17%. The average number of panels increased by 6%. The occupancy rate, on the other hand, softened to 51% (2011: 57%).
Revenue from Guangzhou increased by 9% to HK$239 million (2011: HK$220 million) mainly due to a 20% increase in average panel numbers and the 13% rise in ASP. The occupancy rate softened to 50% (2011: 62%).
Revenue derived from all mid-tier cities increased by 9% to HK$668 million for the year. ASP increased by 9% and occupancy rate softened to 61% in 2012 from 66% in 2011. The average number of bus shelter panels increased by 7%. There were ten cities with double-digit revenue growth.
"Our management maintains a cautious view on expectation of a near-term revenue growth given the current economic environment. In the long run, Clear Media is optimistic about prospects of the advertising sector in China on the back of the continuous development of domestic consumption and urbanisation. Going forward, our management plans to further expand our bus shelter advertising network by adding more bus shelter panels and raise the average panel yield which is a function of both the ASP and the average occupancy rate," said Mr. Han Zi Jing, CEO of the Group.
"In the future, the Group expect to utilize its financial resources to strengthen and broaden our core advertising business by expanding our bus shelter network, to consider deployment of new display or interactive technologies at the right timing, to actively explore mergers and acquisition opportunity with a view to profitably expand our advertising footprint in China and Asia Pacific region and to create wealth for shareholders."
Financial Highlights
Income Statement Highlights
For the year ended December 31
| (HK$'000) | 2012 | 2011 | % Change |
| Turnover | 1,522,036 | 1,485,898 | +2.4%[1] |
| EBITDA | 619,245 | 547,456 | +13.1% |
| EBIT | 312,284 | 275,129 | +13.5% |
| Net profit[2] | 219,236 | 187,542 | +16.9% |
| Basic EPS (HK cents) | 41.44 | 35.45 | +16.9% |
| Dividend per share (HK cents) | 15 | 5 | +200% |
| [1] Included in the 2011 business activities were sales generated by the Group's Shenzhen bus body advertising business, an operation which was terminated in December 2011. If we were to exclude the impact brought about by the termination of this business, turnover of the Group increased by 11.8% to HK$1,522 million. [2] Net profit attributable to shareholders of the Company. |
|||
Balance Sheet Highlights
As at December 31
| (HK$'000) | 2012 | 2011 |
| Cash and cash equivalents | 1,289,724 | 973,226 |
| Total assets | 4,017,026 | 3,733,576 |
| Total debt | -- | -- |
| Total equity | 3,377,428 | 3,156,878 |
About Clear Media Limited
Clear Media is the leading outdoor media company in China listed on the Main Board of The Stock Exchange of Hong Kong, and derives 100% of its revenue from the PRC. One of its unique strengths is its parentage - Clear Channel (NYSE: CCO), the world's largest outdoor media company, which brings in global best practices in the industry to the Group. Clear Media has created a standardized bus shelter network that covers nearly 30 key cities and reaches the most affluent consumers in China. The Group enjoys over a 75% market share in all tier-one cities and an average of a 50+% market share in other mid-tier cities and serves leading international and local advertisers.
For more information on Clear Media please visit: http://www.clear-media.net/.
