INVESTORS RELEASE 3 April 2018 PT SURYA CITRA MEDIA Tbk.

Transcription

1 INVESTORS RELEASE 3 April 2018 PT SURYA CITRA MEDIA Tbk. SCM FY 2017 RESULTS ANNOUNCEMENT (All figures are audited and in Rupiah billion unless otherwise stated) PT Surya Citra Media Tbk ( SCM ), its wholly owned television subsidiaries PT Surya Citra Televisi ( SCTV ) and PT Indosiar Visual Mandiri ( IVM ), its 72% owned content and production company PT Indonesia Entertainmen Grup ( IEG ), and its 51% owned production house subsidiary PT Screenplay Produksi ( Screenplay ) are pleased to announce their consolidated results for FY Audience Share SCTV s All Time average audience share for FY 2017 increased by 1.8 points to 14.6% compared to the previous corresponding period. IVM s average All Time audience share increased by 0.7 points to 13.2%. The resulting combined average audience share for SCM was 27.8%, showing an increase of 2.5 points over the previous corresponding period. SCTV held the No. 2 Prime Time spot in FY 2017 due to increasing share. IVM held the No. 4 Prime Time spot over the same period. Figure 1: ALL TIME ( ) - All Demographics 5+ Channel/Year FY 2016 FY 2017 Change %Change SCTV % RCTI % IVM % TRANS % MNCTV % ANTV % TRANS % TVONE % GTV % METRO % In Q SCTV s All Time average audience share was 14.2% versus 12.1% in Q for a strong increase of 2.1 points. IVM increased from 12.0% to 15.5% for also a very strong increase of 3.5 points over the same period. SCTV and IVM ranked No. 3 and 4 respectively amongst television stations in Indonesia for the average All Time All Demographics 5+ during FY

2 Revenue Growth SCTV achieved net revenues of Rp 2,600.3 billion for FY 2017, a decrease of 0.4% from FY 2016, while IVM achieved revenues of Rp 1,836.0 billion, a decrease of 3.7% from FY This has resulted in a decline in total consolidated net revenue of 1.6%. SCTV contributed 58.4% of SCM s television revenue versus 41.2% for IVM. The revenue performance of SCM was broadly in line with market conditions and the audience share changes, with SCTV revenue losing some momentum during a period of weaker than anticipated Prime Time audience share between May to October 2017 and just getting stronger in Q4, whilst IVM s revenue declined as it fell from ranking No. 2 in Prime Time in 2016 to No. 4 in Profit Growth SCM s gross profit in FY 2017 decreased to Rp 2,633.0 billion, down 4.2% from FY The decrease in gross profit is due to the program costs increasing by 2.6%, whilst revenue decreased by 1.6%. SCTV experienced 0.4% higher program costs in FY 2017, whilst IVM experienced an increase in program costs of 7.1% versus the same corresponding period last year. The FY 2017 gross margin achieved by SCTV was 55.3% and for IVM it was 55.5%. SCM s EBITDA for FY 2017 decreased by 7.8% to Rp 1,978.4 billion from Rp 2,146.8 billion in FY As shown in Figure 3 below, the achieved EBITDA margin in FY 2017 was 44.4%, versus 47.5% in the corresponding period last year. 2

3 Depreciation and amortization increased 38.8% to Rp billion. This relates to the amortization of intangible assets from Sinemart acquisition and also investment in replacing and upgrading broadcasting and transmission equipment and towers and building refurbishment at transmission sites. Income for the year attributable to the parent entity decreased by 11.3% year-on-year to Rp 1,331.5 billion at a lower margin of 29.9%, down from 33.2% % -9.9% Costs and Expenses As shown in Figure 6 below, Cost of Program and Broadcasting increased 2.6% year-on-year. The increase in the cost of program and broadcasting is mainly due to airing of Indian series in early 2017 and airing of new programs in Indosiar such as Pantura Show, Mikrofon Pelunas Hutang and Panggung Gembira and also a spin off program of AKSI called AKSI ASIA with contestants from neighboring countries such as Singapore, Brunei and Malaysia. Operating expenses increased by 8.7% year-on-year, as shown below in Figure 7. The increase is due to the consolidation effect of the Sinemart acquisition in January Operating expenses as a percentage of net revenues increased by 1.4 points to 14.7% as they increased whilst the revenues decreased. Employee salaries and benefits costs were just over 64.0% of the operating expenses. 3

4 2.6% Cash Flow Net operating cash flow decreased by 9.7% year-on-year to Rp 1,250.5 billion. The decrease primarily resulted from higher payments to purchase more episodes of fresh FTVs and produce better quality series and programs, and also down payment for several movies as compared to The net investment cash outflow increased by 110.3% to Rp billion as SCM contributed 72% of the Rp billion paid by IEG to acquire 80% of PT Sinemart in January 2017, coming to Rp billion. The free cash flow for FY 2017 was Rp billion, 36.2% lower than FY

5 Financing cash outflows of Rp 1,000.2 billion primarily relate to the disbursement the final dividend for the year 2016 paid in June 2017, and the interim dividend for the year 2017 paid in December The 2017 interim dividend payout ratio was 53% of 9M 2017 net profit after tax. Other Matters Digital Television Broadcasting As advised in the Q Investors Release dated March 30 th 2015, SCM s subsidiaries together with the Ministry of Communication and Information ( Ministry ) and other TV stations filed an appeal to the Administrative High Court in order to protect their interests in relation to the issuance of multiplex licenses to operate digital terrestrial broadcast. On 5 th August 2016, SCM s subsidiaries received notice of the Decision of the Administrative High Court upholding the earlier decision of the Administrative Court of Jakarta to postpone the implementation of all of the Ministry s decisions that issued the multiplex licenses to operate Digital free to air television, which were declared null and void. SCM s subsidiaries together with the Ministry and other TV stations filed cassation to Supreme Court on September 22, 2016 and later on March 14, 2017 received the Cassation Decision Letter that declined the cassation request that was submitted. On September 8, 2017, SCM s subsidiaries, Ministry and other television stations submitted judicial review memory to the Supreme Court. Up to the date of completion of these consolidated financial statements, the judicial review is still in process. There is no contingent liability for SCM s subsidiaries as a result of this Court s decision. Update on Sinemart On April 13, 2017, AFS Partnership as the attorney of PT Rajawali Citra Televisi Indonesia ( RCTI ) published a notice and warning in Sindo's daily newspaper regarding a court judgment in relation to the sale of shares of PT Sinemart Indonesia and the sale of programs produced by PT Sinemart Indonesia, pursuant to West Jakarta District Court's Decision No. 9/PDT.G/2017/ PN.JKT.BRT dated March 16, 2017 based on a claim that is lodged and registered in the registry case dated 6 January 2017 ( West Jakarta District Court Verstek Decision ) against Mr. Leo Sutanto (as Defendant 1) and PT Sinemart Indonesia (as Defendant 2). The West Jakarta District Court Verstek Decision was made without the presence and without knowledge of the defendants (Verstek), Mr. Leo Sutanto (as Defendant 1) and PT Sinemart Indonesia (as Defendant 2). On April 27, 2017, Mr. Leo Sutanto as Plaintiff in Opposition filed opposition claim (Verzet) against the West Jakarta District Court Verstek Decision, as registered in the Case Registry No. 9/Pdt.Plw/2017/PN.Jkt.Brt ( Opposition Claim ). PT Sinemart Indonesia, as the Co- Respondent in Opposition, also submitted its response in Opposition on the Opposition Claim and Objection on June 19, West Jakarta District Court in its court proceeding on October 16 October 2017 has rendered its judgment with regards to Opposition Claim submitted by Mr. Leo Sutanto and 5

6 ruled that the said Opposition Claim cannot be accepted (Niet Ontvankelijke Verlaard) ( West Jakarta District Court Verzet Decision ) The substance of Opposition Claims raised by Mr. Leo Sutanto stated inter alia that: (a) the lawsuit was submitted not upon good faith principle since the Plaintiff (RCTI) intentionally stated an address which was not the domicile of the Claimant; (b) no verbal contract on exclusivity was ever made between RCTI, Mr. Leo Sutanto and PT Sinemart Indonesia; and (c) the witnesses and evidence do not support the existence of the verbal contract and there is no evidence of actual losses of RCTI, which was not considered in the West Jakarta District Court Verzet Decision of 16 October On October 27, 2017, PT Sinemart Indonesia submitted an appeal to the High Court of Jakarta on this West Jakarta District Court Verzet Decision. More details on the legal case are contained in Note 36 of the Company's audited financial statements for the year ended 31 December PT Sinemart Indonesia will always take the required legal measures as stipulated in the provisions of legislation to preserve its rights. 6

7 PT Surya Citra Media Tbk and Its Subsidiaries Consolidated Statement of Profit or Loss and Other Comprehensive Income For The Year Ended December 31, 2017 (Expressed in Millions of Rupiah, Except Earnings per Share) YTD DEC 2017 YTD DEC 2016 % change Net Revenues 4,453,849 4,524, % Program and Broadcasting Expenses 1,820,871 1,774, % Gross Profit 2,632,978 2,749, % as% of Net Revenue 59.1% 60.8% Operating Expenses 654, , % as% of Net Revenue 14.7% 13.3% EBITDA 1,978,439 2,146, % as % of Net Revenue 44.4% 47.5% Depreciation & Amortization 199, , % EBIT 1,779,331 2,003, % as % of Net Revenue 40.0% 44.3% Interest Income/(Expenses) (1,072) 18, % Other Operating Income/(Expenses) 3,784 1, % EBT 1,782,044 2,023, % as % of Net Revenue 40.0% 44.7% Income Tax Expense 464, , % as % of EBT 26% 25% Income For The Year After Merging Entities' Income Adjustment 1,317,748 1,513, % as % of Net Revenue 29.6% 33.5% Merging Entities' Income - (2,484) % Income For The Year Before Merging Entities' Income Adjustment 1,317,748 1,511, % as % of Net Revenue 29.6% 33.4% Other Comprehensive Income (9,483) (9,468) 0.2% Total Comprehensive Income for the Year 1,308,265 1,501, % as % of Net Revenue 29.4% 33.2% Income for the Year Attributable to: Parent Entity 1,331,459 1,500, % Non-Controlling Interests (13,711) 10, % as % of Net Revenue 29.9% 33.2% Total Comprehensive Income For The Year Attributable to: Parent Entity 1,322,625 1,493, % Non-Controlling Interests (14,360) 8, % EPS (Rp. Per share) - full amount % 7

8 PT Surya Citra Media Tbk and Its Subsidiaries Consolidated Statement of Financial Position As of December 31, 2017 (Expressed in Millions of Rupiah) DEC 31, 2017 DEC 31, 2016 ASSETS Current Assets Cash & cash equivalents 233, ,732 Trade receivables - net 1,530,461 1,484,303 Other receivables - net 25,900 49,209 Inventories 765, ,291 Advances & prepaid expenses 116, ,552 Prepaid tax 36, ,094 Total Current Assets 2,708,606 2,952,181 Non-Current Assets Advances for purchase of fixed assets 38,103 25,516 Deferred tax assets - 87,653 Fixed assets - net 1,029, ,766 Intangible assets - net 1,271, ,592 Investment in associated companies 37,250 26,245 Long - term investment 98,624 98,624 Prepaid long-term rent 138, ,672 Estimated claims for income tax refund 23,224 26,189 Other non-current assets - net 40,403 25,174 Total Non-Current Assets 2,677,201 1,868,431 TOTAL ASSETS 5,385,808 4,820,612 LIABILITIES & EQUITY LIABILITIES Current Liabilities Trade payables 297, ,914 Other payables 139, ,504 Accrued expenses 164, ,686 Taxes payables 64,291 95,027 Current maturities of long-term liabilities: Bank Loans 1,769 - Due to a related party 60, ,227 Financing payables 2, Other current liabilities 12,020 23,490 Total Current Liabilities 743, ,468 Non-Current Liabilities Long-term liabilities - net of current maturities: Financing payables 2, Liabilities for employees benefits - net 160, ,266 Deferred Tax Liabilities 74,290 Total Non-Current Liabilities 237, ,736 TOTAL LIABILITIES 980,415 1,115,204 EQUITY Share capital-issued & fully paid 731, ,080 Additional paid-in capital 278, ,633 Treasury stock (41) (41) Other comprehensive income 20,066 28,900 Retained earnings 2,871,401 2,387,981 Non-controlling interests 504, ,855 TOTAL EQUITY 4,405,393 3,705,408 TOTAL LIABILITIES & EQUITY 5,385,808 4,820,612 8

9 PT Surya Citra Media Tbk and Its Subsidiaries Consolidated Statement of Cash Flows For The Year Ended December 31, 2017 (Expressed in Millions of Rupiah) YTD DEC 2017 YTD DEC 2016 % change Net Cash Provided by Operating Activities 1,250,519 1,384, % Net Cash Used in Investing Activties (526,489) (250,323) 110.3% Free Cash Flow 724,031 1,134, % Net Cash Used in Financing Activties (1,000,203) (1,367,807) -26.9% Net Decrease in Cash & Cash Equivalents (276,172) (233,402) 18.3% Cash & Cash Equivalents at Beginning of the Period 454, , % Cash of newly acquired subsidiaries at beginning 55,177 7, % Effect of changes in foreign exchange rates on cash & cash equivalents (220) (4,970) -95.6% Cash & Cash Equivalents at Ending of the Year 233, , % Investor Relations contact details: Olle Wennerdahl Investor Relations, SCM olle.wennerdahl@scm.co.id Phone: ext Fax: Disclaimer Notice: PT Surya Citra Media Tbk and its employees make no representations or warranties as to the adequacy, completeness, suitability or alike for any purpose of the information contained in this release, and disclaim liability for any error or omissions therein and for any damages whatsoever or howsoever arising, including from any action taken in reliance on any information in this release. 9