Grupo Radio Centro Reports Second Quarter and First Half 2008 Results

Grupo Radio Centro Reports Second Quarter and First Half 2008 Results

MEXICO CITY, July 21 /PRNewswire-FirstCall/ -- Grupo Radio Centro, S.A.B. de C.V. (NYSE:RC)(NYSE:BMV:)(NYSE:RCENTRO-A) (the "Company"), one of Mexico's leading radio broadcasting companies, announced today its results of operations for the second quarter and first half ended June 30, 2008. All figures were prepared in accordance with the Financial Reporting Standards issued by the Mexican Board for Research and Development of Financial Information Standards.

Second Quarter Results

Broadcasting revenue for the second quarter 2008 was Ps. 173,613,000, representing an increase of 16.1% compared to the Ps. 149,589,000 reported in the second quarter 2007. This increase was mainly attributable to higher advertising expenditures from the Company's clients, who purchased more airtime during the second quarter 2008 compared to the same period 2007. This was a result of a highly competitive environment, mainly in the retail sector, the Company's efforts to gain market share with competitive sales plans and the strengthening of the Company's sales force staff.

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the second quarter 2008 were Ps. 108,856,000, representing an increase of 5.0% compared to the Ps. 103,641,000 reported in the second quarter 2007. This increase was primarily due to higher sales commissions to the Company's general sales force as a result of the increase in broadcasting revenue, as well as higher expenses related to the Company's promotional activities, market research, and advertising during the second quarter 2008 compared to the same period 2007.

For the second quarter 2008, the Company reported broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) of Ps. 64,757,000, a 40.9% increase compared to the Ps. 45,948,000 reported in the second quarter 2007. This increase in broadcasting income was mainly attributable to the aforementioned increase in broadcasting revenue.

Depreciation and amortization expenses for the second quarter 2008 were Ps. 8,051,000, a 9.0% decrease compared to the Ps. 8,851,000 reported in the second quarter 2007. Depreciation and amortization expenses were lower in the second quarter 2008 due to the Company no longer recording depreciation on certain assets whose useful lives have ended.

The Company's corporate, general and administrative expenses were Ps. 3,805,000 in the second quarter 2008, compared to the Ps. 3,834,000 reported in the second quarter 2007.

The Company reported operating income of Ps. 52,901,000 in the second quarter 2008, a 59.0% increase compared to the Ps. 33,263,000 in operating income reported in the second quarter 2007. This increase was due to increased broadcasting revenue during the second quarter 2008 compared to the second quarter 2007, as described above.

During the second quarter 2008, other expenses, net, were Ps. 12,622,000, a 32.6% increase compared to the Ps. 9,521,000 reported in the second quarter 2007. This increase was mainly attributable to higher legal expenses during the second quarter 2008 compared to the comparable period of 2007.

The Company's comprehensive financing cost for the second quarter 2008 was Ps. 4,370,000, an increase of 69.6% compared to the Ps. 2,576,000 reported in the second quarter 2007. This unfavorable change was mainly due to fees paid in the second quarter 2008 in connection with amendments to the Company's credit facility with GE Capital CEF Mexico, S. de R.L. de C.V. and Banco Inbursa S.A., which was set to expire in June, 2008 and was renewed for an additional two years.

For the second quarter 2008, the Company reported income before taxes of Ps. 35,909,000, an increase of 69.7% compared to the Ps. 21,166,000 reported in the second quarter 2007, primarily from the increase in broadcasting income during the second quarter 2008, as described above.

The Company recorded income taxes of Ps. 10,469,000 in the second quarter 2008, an increase of 104.6% compared to the Ps. 5,117,000 recorded in the second quarter 2007. This increase was due to higher taxable income in the second quarter 2008 compared to the comparable period.

As a result of the foregoing, the Company's net income for the second quarter 2008 reached Ps. 25,440,000, an increase of 58.5% compared to net income of Ps. 16,049,000 reported in the second quarter 2007.

First Half Results

For the six months ended June 30, 2008, broadcasting revenue was Ps. 301,871,000, representing an 8.5% increase compared to the Ps. 278,123,000 reported in the same period 2007. The increase in broadcasting revenue was mainly attributable to an increase in advertising expenditures by the Company's clients, who purchased more airtime during the first half 2008 than the comparable period. This was the result of a highly competitive environment, mainly in the retail sector, as well as the Company's efforts to gain market share with competitive sales plans and the strengthening of the Company's sales force staff.

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2008 were Ps. 212,837,000, a slight decrease compared to the Ps. 213,610,000 reported in the same period 2007.

Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2008 was Ps. 89,034,000, an increase of 38.0% compared to the Ps. 64,513,000 reported in the same period 2007. This increase was mainly attributable to the increase in broadcasting revenue, as described above.

Depreciation and amortization expenses for the first six months of 2008 were Ps. 15,732,000, a decrease of 11.5% compared to the Ps. 17,780,000 reported in the same period 2007. This decrease was due to the Company no longer recording depreciation on certain of the Company assets whose useful lives have ended.

The Company's corporate, general and administrative expenses for the first six months of 2008 were Ps. 7,300,000, a slight increase compared to the Ps. 7,273,000 reported in the same period 2007.

As a result of the foregoing, the Company reported operating income of Ps. 66,002,000 for the first six months of 2008, a 67.3% increase compared to the Ps. 39,460,000 reported in the same period 2007.

Other expenses, net, for the first six months of 2008 were Ps. 24,445,000, a 19.3% increase compared to the Ps. 20,498,000 reported in the same period 2007. This increase was mainly attributable to higher legal expenses during the second quarter 2008, as well as other expenses related to the Company's listings on the Bolsa Mexicana de Valores (the Mexican stock exchange) and The New York Stock Exchange compared to the same period 2007.

The Company's comprehensive cost of financing for the first six months of 2008 was Ps. 4,507,000, a 118.2% increase compared to the Ps. 2,066,000 reported in the same period 2007. This unfavorable change was mainly due to fees paid in the second quarter 2008 in connection with the amendment of the Company's credit facility, as described above.

For the first six months of 2008, the Company reported income before taxes of Ps. 37,050,000, a 119.3% increase compared to the Ps. 16,896,000 reported in the same period 2007, mainly due to the previously mentioned increase in broadcasting revenue.

The Company recorded income taxes of Ps. 10,800,000 for the first six months of 2008, compared to the Ps. 3,815,000 recorded in the same period 2007, primarily due to higher taxable income.

As a result of the foregoing, the Company reported net income of Ps. 26,250,000 in the first half of 2008, more than double the Ps. 13,081,000 reported in the first six months of 2007.

Company Description

Grupo Radio Centro owns and/or operates 14 radio stations. Of these 14 radio stations, Grupo Radio Centro operates 11 in Mexico City. The Company's principal activities are the production and broadcasting of musical and entertainment programs, talk shows, news and special events programs. Revenue is primarily derived from the sale of commercial airtime. In addition to the Organizacion Radio Centro radio stations, the Company also operates Grupo RED radio stations and Organizacion Impulsora de Radio (OIR), a radio network that acts as the national sales representative for, and provides programming to, Grupo Radio Centro-affiliated radio stations.

Note on Forward Looking Statements

This release may contain projections or other forward-looking statements related to Grupo Radio Centro that involve risks and uncertainties. Readers are cautioned that these statements are only predictions and may differ materially from actual future results or events. Readers are referred to the documents filed by Grupo Radio Centro with the United States Securities and Exchange Commission, specifically the most recent filing on Form 20-F, which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements are based on information available to Grupo Radio Centro on the date hereof, and Grupo Radio Centro assumes no obligation to update such statements.

GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED UNAUDITED BALANCE SHEETS
as of June 30, 2008 and 2007 (1)
(figures in thousands of Mexican pesos ("Ps.") and
U.S. dollars ("U.S. $") (2)

June 30,
2008 2007
U.S. $(2) Ps. Ps.
ASSETS
Current assets:
Cash and temporary investments 10,148 104,366 48,261

Accounts receivable:
Broadcasting, net 15,731 161,774 189,877
Other 550 5,658 5,753
Income taxes recoverable 0 0 6,488
16,281 167,432 202,118

Prepaid expenses 2,548 26,206 23,148
Total current assets 28,977 298,004 273,527

Property and equipment, net 45,475 467,669 473,077
Deferred charges, net 507 5,216 4,005
Excess of cost over book value of
net assets of subsidiaries, net 80,597 828,863 828,862
Other assets 323 3,325 3,381
Total assets 155,879 1,603,077 1,582,852

LIABILITIES
Current:
Advances from customers 10,814 111,219 102,977
Suppliers and other accounts
payable 7,004 72,030 63,823
Taxes payable 2,363 24,299 24,483
Total current
liabilities 20,181 207,548 191,283

Long-Term:
Reserve for labor liabilities 5,846 60,116 55,144
Deferred taxes 217 2,233 5,278
Total liabilities 26,244 269,897 251,705

SHAREHOLDERS' EQUITY
Capital stock 109,918 1,130,409 1,130,409
Cumulative earnings 15,387 158,240 156,220
Reserve for repurchase of
shares 4,263 43,839 43,839
Minority interest 67 692 679
Total shareholders'
equity 129,635 1,333,180 1,331,147
Total liabilities and
Shareholders' equity 155,879 1,603,077 1,582,852

(1) Amounts for the second quarter 2007 are expressed in Mexican pesos
with purchasing power as of December 31, 2007.

As a result of a change in MFRS for periods beginning in 2008, we have
not prepared 2008 amounts using inflation accounting or re-expressed
2007 amounts as of June 30, 2008.

(2) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.2841 per U.S. dollar,
the rate on June 30, 2008.

GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED UNAUDITED STATEMENTS OF INCOME
for the three-month and six-month periods ended
June 30, 2008 and 2007 (1)
(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars
("U.S.$")(2), except per Share and per ADS amounts)

2nd Quarter Accumulated 6 months
2008 2007 2008 2007
U.S.$(2) Ps. Ps. U.S.$(1) Ps. Ps.

Broadcasting revenue
(3) 16,882 173,613 149,589 29,353 301,871 278,123
Broadcasting expenses,
excluding
depreciation,
amortization and
corporate, general
and administrative
expenses 10,585 108,856 103,641 20,696 212,837 213,610
Broadcasting income 6,297 64,757 45,948 8,657 89,034 64,513

Depreciation and
amortization 783 8,051 8,851 1,530 15,732 17,780
Corporate, general and
administrative
expenses 370 3,805 3,834 710 7,300 7,273
Operating income 5,144 52,901 33,263 6,417 66,002 39,460

Other expenses, net (1,227) (12,622) (9,521) (2,377) (24,445) (20,498)

Comprehensive
financing cost:
Interest expense (374) (3,844) (871) (459) (4,718) (1,399)
Interest income (3) (44) (452) (1,673) 31 315 128
(Loss) Gain on
foreign currency
exchange, net (7) (74) (32) (10) (104) 1
(Loss) Gain on net
monetary position(4) 0 0 0 0 0 (796)
(425) (4,370) (2,576) (438) (4,507) (2,066)

Income before income
taxes 3,492 35,909 21,166 3,602 37,050 16,896

Income taxes 1,018 10,469 5,117 1,050 10,800 3,815
Net income 2,474 25,440 16,049 2,552 26,250 13,081

Net income applicable
to:
Majority interest 2,473 25,434 16,045 2,551 26,235 13,072
Minority interest 1 6 4 1 15 9
2,474 25,440 16,049 2,552 26,250 13,081

Net income per Series
A Share (5) 0.062 0.6407 0.5001
Net income per ADS (5) 0.561 5.7663 4.5009
Weighted average
common shares
outstanding (000's) (5) 162,725 162,592

(1) Amounts for the second quarter 2007 are expressed in Mexican pesos
with purchasing power as of December 31, 2007.
As a result of a change in MFRS for periods beginning in 2008, we
have not prepared 2008 amounts using inflation accounting
or re-expressed 2007 amounts as of June 30, 2008.

(2) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.2841 per U.S.
dollar, the rate on June 30, 2008.

(3) Broadcasting revenue for a particular period includes (as a
reclassification of interest income) interest earned on funds
received by the Company pursuant to advance sales of commercial air
time to the extent that the underlying funds were earned by the
Company during the period in question. Advances from advertisers are
recognized as broadcasting revenue only when the corresponding
commercial air time has been transmitted. Interest earned and treated
as broadcasting revenue for the second quarter of 2008 and 2007 was
Ps. 1,393,000 and Ps. 537,000, respectively. Interest earned and
treated as broadcasting revenue for the six months ended June 30,
2008 and 2007 was Ps. 2,361,000 and Ps. 934,000, respectively.

(4) As a result of a change in MFRS for periods beginning in 2008, we
will no longer use inflation accounting unless the economic
environment is "inflationary", as defined by MFRS. Since the economic
environment was not inflationary in the second quarter 2008, we have
not reported gain (loss) on net monetary position for this period.

(5) Earnings per share calculations are made for the last twelve months
as of the date of the income statement, as required by the Mexican
Stock Exchange.

First Call Analyst:
FCMN Contact: pmajeski@i-advize.com

Source: Grupo Radio Centro

CONTACT: In Mexico: Pedro Beltran, or Alfredo Azpeitia,
aazpeitia@grc.com.mx, both of Grupo Radio Centro, S.A.B. de C.V.,
+(5255)-5728-4800 Ext. 7018; In NY: Maria Barona, or Peter Majeski, both of
i-advize Corporate Communications, Inc. +1-212-406-3690, grc@i-advize.com.mx,
both for Grupo Radio Centro

Web site: http://www.radiocentro.com.mx/

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