August 11, 2011 / 6:16 AM / 8 years ago

UPDATE 2-TVN gets bad reception after warning on sales

(Adds share price reaction, details on planned sale)

* Q2 net profit PLN 68 mln vs 86 mln in poll

* Sees sales up 7 pct in 2011, 11 pct in 2012

* Expects EBITDA of PLN 680 mln in 2011, 770 mln 2012

* EBITDA projections disappoint analyst

* Plans dividend of 50 pct of profit, starting with 2011 earnings

By Adrian Krajewski and Agnieszka Barteczko

WARSAW, Aug 11 (Reuters) - Polish broadcaster TVN reported disappointing second-quarter net profit and warned of weaker sales in the second half on continued weak advertising spending, dragging its shares to their lowest since November 2009.

Shares in TVN dropped as much as 8.3 percent and were down 6.1 percent by 0743 GMT, while Warsaw’s main index shed 0.8 percent.

“It seems profitability in the TV segment was weaker, which means programming costs were higher than the market expected,” said Przemyslaw Sawala-Uryasz, analyst at UniCredit.

TVN, put up for sale by majority owner ITI, said it expected sales to rise around 7 percent in 2011, or at half its 2010 pace, and 11 percent in 2012, compared with 8.5 percent growth in the first half.

The rise should stabilise at around 10 percent in 2013-15, TVN said, adding it expected in TV advertising growth rising to upper single digits next year, from mid-single digits in 2011.

TVN posted net profit of 68 million zlotys ($23 million), compared with a forecast for 86 million, after bouncing back from a 98 million loss in the 2010 period, when the bottom line was weighed by one-off factors.

TVN, which controls Poland’s No. 1 web portal and pay-TV platform ‘n’, also expected group core 2012 profit (EBITDA) of 770 million zlotys, up from the 680 million seen this year and 628 million in 2010.

“The targeted EBITDA for 2011 and 2012 is far below market expectations,” Sawala-Uryasz said. “We saw the figure at 710 million this year and 825 million in 2012.”

TVN said it planned a dividend of around 50 percent of profit starting with 2011 earnings, with investment seen at around 250 million zlotys in 2011 and 2012.

The group, valued at $1.7 billion, has more than erased all last year’s gains with a 22-percent share price drop this year, despite a short-lived jump back after ITI said last month it hired JP Morgan and Nomura to find a buyer for its 56-percent TVN stake.

Sources told Reuters that ITI approached five possible buyers, with Time Warner , Bertelsmann (BTGGg.F) and Fox, part of Rupert Murdoch’s News Corp , among those mentioned.

TVN has focused mainly on an urban audience, with shows such as the Polish versions of Dancing with the Stars and The X Factor, as well as a rising number of its own formats.

$1 = 2.914 Polish zlotys Editing by Dan Lalor and David Hulmes

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