Rambler Media Limited
The issuer advises that the following replaces the Interim Results announcement
released yesterday (26 September 2006) at 07:04 BST. In section 9 titled
"Revenue and Other Income", the figure under "1 Jan to 30 June, 2006" for
Internet should read 11,639 sted 11,439; and the figure under "1 Jan to 30 June,
2006" for Television should read 2,154 sted 2,354.
All other details remain unchanged. The full corrected text appears below.
137% period on period increase in internet revenue
Nearly 100% period on period increase in total revenue
EBITDA* positive at Group level for the first time for the period
Rambler Media Limited (RMG.LN), a leading integrated media company providing
services to the global Russian-speaking community, today announced its financial
results for the six months ended 30 June 2006.
FINANCIAL HIGHLIGHTS
-- Total revenue up nearly 100% period on period to US$ 16 million (US$ 8
million)
-- Internet total revenue up 137% to US$ 12.3 million (US$ 5.2 million),
representing 78% of total Group revenue
-- Group business profitable for first time in first half of the year with
net profit of US$ 2.5 million (net loss of US$ 2.3 million)
-- Strong balance sheet with US$ 20 million of cash at period end
OPERATING HIGHLIGHTS
-- Over 50% period on period increase in number of unique monthly users of
Rambler.ru to over 21 million
-- 80% increase in monthly page views to 1.5 billion
-- More than 1.6 million Rambler-ICQ Instant messaging unique users per
month in less than one year after the service was launched
-- Acquisition of 51% of Price Express, a leading Russian price comparison
internet company, operating www.price.ru, www.domoteka.ru and
www.tyndex.ru , enabling Rambler to expand its range of online services
-- Exclusive partnership with Trader Media East Ltd for launch of online
classifieds ads in Russia with leading newspaper Iz Ruk V Ruki
-- Acquisition of 51% of online Russian social network www.damochka.ru and
51% of online banner technology company Bannerbank
-- Favourable market trends and new service launches provide support for
anticipated continued growth in the rest of the year and beyond
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* Earnings before interest, tax, depreciation and amortisation
*T
Irina Gofman, Chief Executive Officer of Rambler Media, commented: �Euro �Rambler
Media reports its second consecutive profitable half year for the Group. Our
growth continued to accelerate through the first six months of 2006, driven by
the introduction of new innovative online services and increasing internet
penetration in Russia. These solid results (+137% internet revenue period on
period) reflect our continued focus on our internet business, now accounting for
nearly 80% of our group revenue, and reinforce Rambler�Euro �s position as the number
one multi-service internet portal for the Russian community. Our TV division
continues to demonstrate strong sales growth and we have successfully adapted
our strategy in our Mobile Content business to quickly reach profitability in
the segment. We are confident that these favourable market trends will continue
in the second half of the year and beyond.�Euro ?
FINANCIAL SUMMARY
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(US$ �Euro �000s) Jan - Jun Jan �Euro � Jun Jan �Euro � Dec Jan �Euro � Dec
2006 2005 2005 2004
(reviewed) (reviewed) (audited) (audited)
Net sales 15,117 8,028 21,421 12,505
Other income 684 - 515 -
---------------------------------------------------------
Total revenue 15,801 8,028 21,936 12,505
EBITDA* profit/(Loss) 1,608 (1,501) (568) (2,690)
Net profit/(loss) 2,477 (2,334) (2,384) (4,412)
Profit/(loss) per share -
basic and fully diluted
(US$) 0.16 (0.16) (0.18) (0.41)
Profit/(loss) per share -
fully diluted (US$) 0.16 (0.15) (0.17) (0.41)
*T
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* Earnings before interest, tax, depreciation and amortisation
*T
Overview
Rambler Media reported nearly 100% period on period increase in total revenue to
US$ 16 million for the first six months of 2006. This figure includes US$ 0.68
million of income from Rambler�Euro �s 25% stake in Begun.ru, paid search platform.
The Group reported its first net profit for the period at US$ 2.5 million (loss
of US$ 2.3 million in H1 2005). The ongoing investments in the operating
businesses reflect Rambler Media�Euro �s focus on increasing the penetration and
market share of its brands, technologies, products and services.
Internet
Rambler Internet reported a significant increase in EBITDA following strong
period on period growth in the number of users and in advertising sales. The
Internet segment�Euro �s EBITDA reached US$ 3.35 million in the first six months of
2006, up from US$ 0.5 million in H1 2005. Total revenue in the Internet services
division grew by 137% period on period from US$ 5.2 million to US$ 12.3 million
and represented 78% of total Group revenue for the year.
A leading Internet portal for the Russian community
Rambler Internet�Euro �s primary business is Rambler.ru (www.rambler.ru), a leading
Russian language Internet portal offering search, communication and media
services. It is complemented by a number of other web properties, including
leading on-line Russian language newspaper Lenta.ru (www.lenta.ru), which
attracted an average of 2.7 million unique visitors per month in the first six
months of the year, and several specialised web resources. Rambler Internet
generates its revenues primarily from banner advertising, sponsored key word
searches and e-commerce. Rambler Media has a 25% plus one share equity stake in
Begun.ru, a fast growing Russian sponsored search company, and retains an option
to increase its stake in Begun.ru in the future.
In the first half of 2006, Rambler.ru reached 21 million unique monthly users,
up more than 50% from the 13.6 million users in the first half of 2005. This
growth rate is well above the average 25% yearly increase in Russian Internet
penetration, demonstrating the increased take-up and usage of Rambler and its
growing market share. Today, 65% of all Russian internet users regularly visit
Rambler.ru, making it one of the most visited internet site in Russia. Internet
advertising is the fastest growing segment of the Russian advertising market and
was estimated to have increased by 71% year on year in 2005 to US$ 60 million
(US$ 35 million) (Source: Russian Association of Communication Agencies - RACA).
Rambler-ICQ
One of Rambler�Euro �s most successful recent projects has been its partnership with
ICQ to offer instant messaging services. Before its partnership with Rambler,
ICQ had 2 million users in Russia. Since Rambler-ICQ�Euro �s launch at the end of 2005
and throughout the first half of 2006, ICQ has been used by 3.6 million users,
of whom 1.6 million are active users via the Rambler-ICQ joint service
(http://icq.rambler.ru/). This means that one out of every 3 ICQ user in Russia
has been using Rambler-ICQ less than a year after the service was launched, thus
nearly doubling the total number of ICQ users. Furthermore, Rambler-ICQ users
have proven to be twice as active as average ICQ users. The appeal of
Rambler-ICQ is that it integrates Rambler email services and provides access to
Rambler�Euro �s internet search engine and online games, as well as Russian-language
news, weather forecasts and other useful information. In March 2006, the ICQ
2-Way SMS service was introduced to enable ICQ users to create and send SMS
messages directly from their desktop to GSM users in the Russian Federation and
allow the mobile recipient to reply back directly to the ICQ user. Instant
Message Forwarding also allows ICQ users to forward their instant messages via
SMS directly to their mobile phone and reply back directly to the sender.
Acquisitions and Partnerships
In January, Rambler Media bought 51% of Price Express, a leading e-commerce
internet company operating the portals price.ru (www.price.ru), Domoteka.ru
(www.domoteka.ru) and Tyndex.ru (www.tyndex.ru). The portals provide price and
product comparison tools designed to help online shoppers make the most
cost-effective buying decisions. Price Express has a database of 40 million
priced items, offering consumers one of the largest and quickest buying choices
in the Russian internet market. Over 1 million shoppers visited Price Express�Euro �s
websites every month in the period.
In April, Rambler Media entered into an exclusive partnership with Trader Media
East Limited, a leader in classified advertising, to create a co-branded website
which will give Rambler.ru customers access to online classified content in
Russia. Trader Media East�Euro �s operation in Russia & CIS, better known for its
local brand �Euro �Iz Ruk v Ruki�Euro �, produces 144 publications, totaling 75 million ads
per year and 3.8 million readers per week. The website www.irr.ru aggregates
content from publications in 81 cities and 4 other websites and employs
state-of-the-art technology with over 1.4 million ads of content. Through the
launch of a new co-branded website, Iz Ruk v Ruki private and professional
customers will be able to distribute their ads through Rambler to maximise the
effectiveness of their advertising and to access Rambler�Euro �s numerous online
properties and services. The new service will also enable Rambler�Euro �s users to
search through the biggest database of classified ads from all regions of
Russia.
In June, Rambler Media announced its intention to acquire Damochka.ru
(www.damochka.ru) and BannerBank from eHouse Holding. Damochka.ru is a leading
Russian language, social network, and personal ads website with over 1.7 million
registered users. Dating and social networking is proving very popular in Russia
and the acquisition reinforces Rambler�Euro �s position as the number one
multi-service internet portal for the Russian community. BannerBank operates a
Virtual Banner Network (VBN), one of Russia�Euro �s most sophisticated banner exchange
networks, which optimises online advertising campaigns and provides detailed
information about the impact of banner advertising. It generates approximately
130 million banner views per day. The acquisition of 51% of each business was
completed by Rambler in July.
Other new services
In the first half of 2006, Rambler launched a specific page for its users
located in the United States. Rambler users in the US, estimated at more than
0.6 million for Rambler.ru, are now able to view more US-specific search and
news results when accessing Rambler.ru�Euro �s main page from North America. This
reflects Rambler Media�Euro �s strategy to explore further opportunities for American
advertisers to target the US Russian speaking community and benefit from higher
advertising prices in the United States, a more mature market than Russia.
New game services were recently introduced as part of Rambler.ru�Euro �s main portal,
including multiplayer and skill games. This is in addition to Rambler�Euro �s new
online gaming portal (www.ramblas.ru), which has been developed in partnership
with St Minver and is still in Beta version before its official launch.
Internet outlook
Market trends remain favourable, with the number of Internet users in Russia
forecast to increase by approximately 29% year on year in 2006 according to the
Ministry of Informatisation and Communication. The internet advertising market
is expected to grow by 65% to 70%, according to the Russian Association of
Communication Agencies. The value of the Internet access and data transmission
services markets is forecast to grow by 33% year on year to US$ 2 billion in
2006 according to Jason and Partners, whilst the total value of B2C product and
service transactions was estimated to have increased by 35% to US$ 1.5 billion
in 2005. Rambler Internet is well positioned to benefit from this growth due to
its established brand, large and growing market share, and its wide range of
existing and new services. (Source: Russian Association of Communication
Agencies (RACA), J�Euro �son & Partners, Ministry of Communications, National
Association of Electronic Commerce)
Mobile
At the beginning of the year, Rambler Media rebranded SMXCOM as �Euro �Rambler
Mobile�Euro �, creating better association with Rambler Internet.
Sales of Mobile VAS reached US$ 1.3 million (US$ 1.9 million) in the first half
of 2006, and accounted for 8% of Group revenues in the period (23% of Group
revenues in H1 2005), clearly demonstrating the Group�Euro �s increased focus on its
core Internet activities.
The mobile content sector (SMS, MMS and premium SMS content) in Russia has grown
at a slower pace than initially forecast by market sources, up 21% in 2005 to
US$ 350 million (from US$ 290 million) (Source: Jason and Partners Russian
Wireless Content Report 2005-2007). Due to the slower growth and the increased
competition in the mobile content market in Russia, the Group has adapted
Rambler Mobile�Euro �s business model to be increasingly focused on a revenue sharing
model in order to avoid incurring direct advertising costs.
In the period, Rambler Mobile reported an EBITDA loss of US$ 0.3 million, nearly
reaching breakeven point. Rambler Mobile continued to invest in the development
and marketing of its mobile content brands and its relationships with Mobile
TeleSystems, VimpelCom and Megafon in Russia, which together account for
approximately 90% of mobile subscribers.
90% of Rambler Mobile�Euro �s sales are generated from in-house developed SMS-based
products and the Company also has licensing agreements with third party
providers of content such as ring tones, icons, screen savers and games.
Revenues are generated from a share of the fixed fees paid by subscribers to
their network provider for the download of Rambler Mobile products.
New services have recently been launched including Interactive Voice Retrieval
(IVR) services, on line / offline interactive mobile games, and ICQ 2-way SMS.
Further integration with Rambler web properties is reflected in such projects as
dating, photo and video, and horoscopes.
Rambler Mobile plans to be in the position to offer mobile users a wide range of
premium rate voice and SMS services at competitive rates and thereby increase
revenue and improve profitability. Rambler Mobile further expects to benefit
from enhanced mobile phone capabilities and deployment of new cellular
technologies, as well as closer integration with other Rambler Media owned
companies by adding and integrating mobile content to existing products,
programming and services.
Television
Sales generated by Rambler TV grew by 129% period on period to US$ 2.2 million
from less than US$ 1 million in the first half of last year, and represented 14%
of Group revenues in the period. Revenues are primarily generated from the sale
of advertising airtime, as well as �Euro �below the line�Euro � advertising. The division
reported an EBITDA loss of US$ 1.4 million from a loss of US$ 1.3 million in the
first half of 2005.
Rambler TV is a free-to-air documentary and entertainment channel, which holds a
national broadcasting license in Russia and reaches 40 million people through a
network of 900 local affiliate stations broadcasting in 470 towns and cities
across Russia. 30% of the content is produced by Rambler Media. The channel�Euro �s
core target audience is 25-45 year-old adults, which is the most economically
active segment of the population. Research by TNS Gallup Media in July 2005
demonstrated that Rambler TV reaches consumers who have higher than average
education.
The gross TV Advertising market grew by 35% year on year in 2005 to US$ 2.3
billion, and accounted for 47% of total Russian gross advertising spend during
the period (Source: Russian Association of Communication Agencies (RACA)).
Rambler TV�Euro �s national share of viewing amongst the total universe of viewers
between the age of 6 and 54 grew by 26% from 0.34% in first half 2005 to 0.43%
in the first half 2006, including growth in the Saint Petersburg�Euro �s station share
from 1.56% to 1.9%. Rambler TV has also continued to invest in increasing its
national penetration, which rose by 38% from 24% to 33% for the period. (Source:
TNS Gallup Media, April-June 2006)
FINANCIAL POSITION
The Company ended the period with cash balances of US$ 20 million.
RECENT DEVELOPMENTS
Rambler Media expects to benefit from the Russian Federation Government�Euro �s new TV
advertising law introduced by the State Duma, which reduced the allowable
advertising airtime for the major TV channels with effect from July 1, 2006.
Prices of TV advertising on the leading channels are expected to increase as a
result of the new legislation, which may encourage advertisers to seek
alternative marketing channels, such as smaller TV networks and online media.
At an Extraordinary General Meeting of shareholders held in Jersey on 7 July,
Mr. Alexander Rappoport, Mr. Oleg Edward Radzinsky and Mr. Vitaly Rudenko were
appointed as new Non-executive Directors of the Company and Dr. Valentin Zorin
resigned from the Board of Directors. However, Dr. Zorin continues in his
position as chairman of Rambler Media�Euro �s advisory panel.
Also during the Summer, Rambler signed an agreement with Fast Search & Transfer
ASA (FAST) to deploy the FAST Enterprise Search Platform (FAST ESP) across its
Internet business. This will provide Rambler with improved technological modules
in order to expand Rambler�Euro �s proprietary search engine capabilities. The first
phase of implementation of the FAST upgrade will take place in the second half
of the year.
Finally, Rambler has acquired 26% of Chess Planet, which operates the portal
with the same name: (www.chessplanet.ru) with the intention to launch a joint
website that will allow Rambler users to play virtual chess on the Rambler web
portal. Chess Planet is an international Russian-language online club where
chess enthusiasts can play chess, improve their skills, as well as train other
players. 715,000 games were played on Chess Planet in the last months, twice as
many as at the start of 2006, and Chess Planet visitors spend an average of 2 to
3 hours a day on the portal.
OTHER INFORMATION
The Company�Euro �s consolidated accounts have been prepared according to
International Financial Reporting Standards (IFRS). The following preliminary
financial information has been approved for release by the company�Euro �s auditors.
The company will host a conference call to present the results at 5:00 pm
(Moscow Time)/ 3:00 pm (CET) / 2:00 pm (London Time) / 9:00 am (New York Time)
today. The results statement and related documentation are available on Rambler
Media�Euro �s website at www.ramblermedia.com. To participate in the conference call,
please register online at www.sharedvalue.net/ramblermedia/hy2006. The number
for the conference call will be available upon registration.
For further information, please visit www.ramblermedia.com or contact:
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Rambler Media Shared Value Limited
Irina Gofman Nicolas Duperrier
Tel. +7 495 500 3826 Tel. +44 (0) 20 7321 5010
rambler@sharedvalue.net
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ABOUT RAMBLER MEDIA
Rambler Media is an integrated and diversified Russian language media,
entertainment, services and content delivery company with three main segments:
internet services, mobile value added services, and television broadcasting.
Rambler Media operates businesses including the Russian language internet portal
and search engine 'rambler.ru', on-line newspaper 'Lenta.ru�Euro �, broadband ISP
'Rambler Telecom', interactive advertising company 'Index20', mobile content
service provider 'Rambler Mobile', and documentary and entertainment TV network
'Rambler TV'. Rambler Media�Euro �s shares are traded on the AIM market of the London
Stock Exchange under the symbol 'RMG'. For more information on Rambler Media,
visit our corporate website at www.ramblermedia.com.
Certain statements within this announcement constitute forward looking
statements. Such forward looking statements involve risks and other factors
which may cause the actual results, achievements or performance of the Company
to be materially different from any future results, achievements or performance
expressed or implied by such forward looking statements. Such risks and other
factors include, but are not limited to, general economic and business
conditions, changes in government regulations, and court interpretations of such
regulations, currency fluctuations (including the US$/Rbs rate), competition,
changes in development plans. There can be no assurance that the results and
events contemplated by the forward looking statements contained in this
announcement will, in fact, occur. Any forward looking statements made in this
announcement represent management�Euro �s best judgment as to what may occur in the
future and are correct only as at the date of this announcement. The Company
will not undertake any obligation to release publicly any revisions to these
forward looking statements to reflect events, circumstance or unanticipated
events occurring after the date of this announcement except as required by
applicable law or by any applicable regulatory authority.
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INTERIM SUMMARISED CONSOLIDATED PROFIT & LOSS ACCOUNT
(US $�Euro �000s)
Notes 1 January 2006 1 January 2005 to
to 30 June 30 June 2005
2006 (reviewed)
(reviewed)
-------- -------------- -----------------
Revenue 9 15,117 8,028
Other income 9 684 -
-------------- -----------------
Total Revenue 15,801 8,028
Operating expenses 10 (14,946) (10,178)
-------------- -----------------
Operating profit/(loss) 855 (2,150)
Interest income 569 -
Interest expense (7) (62)
Share of loss of associate - (14)
-------------- -----------------
Profit/(loss) before taxation
1,417 (2,226)
Taxation 1,060 (50)
-------------- -----------------
Profit/(loss) for the period 2,477 (2,276)
Attributable to
- equity holders of the company 2,407 (2,334)
- minority interest 12 70 58
-------------- -----------------
2,477 (2,276)
============== =================
Earnings per share for profit/(loss)
attributable to the equity holders of
the company, expressed in cents per
share
- basic 13 16 (16)
- diluted 13 16 (15)
The accompanying notes are an integral part of this profit and loss account.
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INTERIM SUMMARISED CONSOLIDATED BALANCE SHEET
(US $�Euro �000s)
Notes 30 June 31 December
2006 2005
(reviewed) (audited)
-------- -------------- ---------------
Assets
Non Current Assets
Property, plant and equipment 6 4,090 3,815
Intangible assets 7 17,903 15,770
Financial assets 8 778 778
-------------- ---------------
22,771 20,363
Current Assets
Trade debtors 4,868 3,690
Inventory 436 367
Prepayments 851 392
VAT, net 439 558
Other receivables 1,665 861
Bank and cash balances 19,967 21,482
-------------- ---------------
28,226 27,350
-------------- ---------------
Total assets 50,997 47,713
============== ===============
Liabilities
Current Liabilities
Trade creditors 2,882 1,213
Deferred income 880 829
Loans 15 10
-------------- ---------------
3,777 2,052
Long Term Liabilities
Loans 131 131
Deferred taxation 649 1,726
-------------- ---------------
780 1,857
-------------- ---------------
Total liabilities 4,557 3,909
Shareholders�Euro � equity
Issued capital 13 151 150
Share premium 56,039 55,902
Options reserve 429 341
Merger reserve 51 51
Accumulated losses (10,256) (12,663)
-------------- ---------------
Total shareholders�Euro � equity 46,414 43,781
Minority interest 11 26 23
-------------- ---------------
Liabilities and
Shareholders�Euro � Equity: 50,997 47,713
============== ===============
The accompanying notes are an integral part of this balance sheet.
These financial statements were approved by the Directors on 25th September 2006.
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INTERIM SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
(US $�Euro �000s)
1 January 1 January 2005
2006 to 30 to 30 June
June 2006 2005
(reviewed) (reviewed)
------------ ---------------
Cash flows from operating activities
Operating result 2,406 (2,334)
Adjusted for:
Minority interest 70 58
Interest receivable (569) -
Interest charged 7 62
Dividends receivable (684) -
Taxation charge (1,060) 50
Cost of share options exercised 88 58
Depreciation and amortisation 754 649
Loss on disposal of fixed assets - -
Increase in debtors and receivables (2,274) (2,652)
Increase/(decrease) in creditors &
payables 1,416 2,569
Taxation paid (12) -
------------ ---------------
Net cash used in operating activities 142 (1,540)
Cash flows from investing activities
Purchase of subsidiary (1,708) -
Purchase of property, plant and
equipment (866) (678)
Acquisition of intangibles (288) (449)
Investments - (792)
------------ ---------------
Net cash used in investing activities (2,862) (1,919)
Cash flows from financing activities
Proceeds from long-term borrowings - -
Repayment of long-term borrowings (10) (1,035)
Proceeds of equity financing 138 27,780
Dividends received 515 -
Interest received 569 -
Interest paid (7) -
------------ ---------------
Net cash from financing activities 1,205 26,745
Net Increase in cash (1,515) 23,286
Cash at the beginning of the period 21,482 6,783
------------ ---------------
Cash at the end of the period 19,967 30,069
============ ===============
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INTERIM SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS�Euro � EQUITY
(US $�Euro �000s)
Attributable to equity holders of the company
---------------------------------------------------------
Issued Additional Options Merger Accum. Total
capital capital/share reserve reserve losses equity
(Note premium
15) (Note 15)
----------------------------------------------- ---------
I January 2005
(audited) 120 29,703 260 51 (10,279) 19,855
Share capital issued 30 30,720 - - - 30,750
Cost of share capital
issued (4,521) - - - (4,521)
Cost of share option - - 94 - - 94
Loss for the period - - - - (2,543) (2,543)
Minority interest (58) (58)
----------------------------------------------- ---------
30 June 2005
(reviewed) 150 55,902 354 51 (12,764) 43,693
Cost of share option - - (13) - - (13)
Profit for the period - - - - 66 66
Minority interest 35 35
------------------------------------------------------------------
31 December 2005
(audited) 150 55,902 341 51 (12,663) 43,781
Share capital issued - - - - - -
Exercise of share
options 1 137 - - - 138
Cost of share option - - 88 - - 88
Profit for the period - - - - 2,477 2,477
Minority interest (70) (70)
----------------------------------------------- ---------
30 June 2006
(reviewed) 151 56,039 429 51 (10,256) 46,414
=============================================== =========
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NOTES (US $�Euro �000s)
1. Rambler Companies and Principal Activities
Rambler Media Limited was incorporated in Jersey on 10 June 2004 as a private
limited company. It was formed to act as a holding vehicle for the media
interests controlled by First Mercantile Net Ventures Fund Ltd. During the year
ended 31 December 2004, the directors of Rambler decided to seek a listing on
the London AIM market. In anticipation of this event the status of the company
was changed to that of a public limited company on 18 October 2004. The Initial
Public Offering took place on 15 June 2005.
The Rambler Group provides a diversified and integrated Russian language media,
entertainment and content service with operations in three main segments:
Internet services, Mobile Value Added Services and Television Broadcasting.
Rambler Media Limited has its registered office at First Island House, Peter
Street, St. Helier, Jersey JE2 4SP. Its principal place of business is 26
Leninskaya Sloboda Ulitsa, Moscow, Russian Federation.
2. Principal Accounting Policies
a) Basis of preparation
The interim financial statements have been prepared in accordance with the
accounting policies set out in the Group's financial statements for the year
ended December 2005. The interim financial statements are unaudited but have
been reviewed by the auditors.
The Group�Euro �s financial report including financial statements and notes thereto is
prepared in compliance with IAS 34 (Interim Financial Reporting). The interim
financial report should be read in conjunction with the annual financial
statements for the year ended 31 December 2005.
The following new standards, amendments to standards and interpretations are
mandatory for financial year ending 31 December 2006:
Amendment to IAS 19, 'Actuarial gains and losses, group plans and disclosures',
This interpretation is considered by the Directors to be not relevant for the
Group;
Amendment to IAS 21, Amendment 'Net investment in a foreign operation', This
amendment is considered by the Directors to be not relevant for the Group;
Amendment to IAS 39, Amendment 'Cash flow hedge accounting of forecast
inter-group
transactions', This amendment is considered by the Directors to be not relevant
for the Group;
Amendment to IAS 39 and IFRS 4, Amendment 'Financial guarantee contracts', .
This amendment is considered by the Directors to be not relevant for the Group;
IFRS 6, 'Exploration for and evaluation of mineral resources',. This standard is
considered by the Directors to be not relevant for the Group;
IFRIC 4, 'Determining whether an arrangement contains a lease', This
interpretation is considered by the Directors to be not relevant for the Group;
IFRIC 5, 'Rights to interests arising from decommissioning, restoration and
environmental
rehabilitation funds', . This interpretation is considered by the Directors to
be not relevant for the Group; and
IFRIC 6, 'Liabilities arising from participating in a specific market - waste
electrical and electronic equipment', This interpretation is considered by the
Directors to be not relevant for the Group.
b) Basis of consolidation
The financial statements consist of Rambler Media Limited (the Company) and its
respective subsidiary undertakings (the Group). On the acquisition of a
business, including an interest in a subsidiary undertaking, fair values are
attributed to the Group�Euro �s share of net separable assets. Where the cost of
acquisition exceeds the fair values attributable to such net assets the
difference is treated as purchased goodwill and capitalised in the balance sheet
in the year of acquisition.
3. Turnover
All proceeds are receivable in the ordinary course of business and are recorded
exclusive of Value Added Tax.
4. Seasonality of the business
Interim operations are subject to regular seasonal reduction of all lines of
business in January of each year due to the Russian Federation national
holidays. The significant reduction in January turnover indices in comparison
with December figures occurs annually.
5. Labour costs
The Group has measured the expected cost of and obligation for accumulated
compensated vacation reserve up to 30 June 2006 at USD 272 thousand, including
all applicable social taxes at the estimated average annual effective tax rate.
6. Leasehold Improvements and Equipment
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Leasehold Office Television Vehicles Total
improvements equipment equipment
----------------------------------------------------------------------
Cost
31 December 2004 516 3,293 1,391 4 5,204
Additions 17 641 20 - 678
Disposals - (41) - - (41)
----------------------------------------------------------------------
30 June 2005 533 3,893 1,411 4 5,841
Additions 8 944 90 - 1,042
On acquisition of
subsidiary 8 30 176 - 214
Disposals - (22) (51) - (73)
----------------------------------------------------------------------
31 December 2005 549 4,845 1,626 4 7,024
Additions 41 792 33 - 866
On acquisition of
subsidiary 67 21 - - 88
Disposals - - - - -
----------------------------------------------------------------------
30 June 2006 657 5,658 1,659 4 7,978
----------------------------------------------------------------------
Accumulated
Depreciation
31 December 2004 194 955 427 2 1,578
Charge 35 366 93 1 495
Disposals - (1) - - (1)
----------------------------------------------------------------------
30 June 2005 229 1,320 520 3 2,072
Charge 160 743 227 1 1,161
On acquisition of
subsidiary 1 2 26 - 29
Disposals - (23) - - (23)
----------------------------------------------------------------------
31 December 2005 390 2,042 773 4 3,209
Charge 36 442 166 - 644
On acquisition of
subsidiary 28 7 - - 35
Disposals - - - - -
----------------------------------------------------------------------
30 June 2006 454 2,491 939 4 3,888
----------------------------------------------------------------------
Net book amount
30 June 2006 203 3,167 720 - 4,090
======================================================================
31 December 2005 159 2,803 853 - 3,815
======================================================================
*T
7. Intangible Assets
-0-
*T
Domain Broadcast Software and Goodwill Total
and network other
trade intangibles
names
-------------------------------------------------------
Cost
31 December 2004 985 8,572 480 571 10,608
(audited)
-------------------------------------------------------
30 June 2005 985 8,572 428 571 10,556
(reviewed)
-------------------------------------------------------
31 December 2005 931 13,626 642 571 15,770
(audited)
-------------------------------------------------------
30 June 2006 (reviewed) 935 13,684 782 2,502 17,903
=======================================================
*T
8. Financial Assets
-0-
*T
1 January 2006 to 1 January 2005
30 June 2006 to 30 June
(reviewed) 2005
(reviewed)
----------------- ---------------
ZAO Begun 771 771
Other 7 7
----------------- ---------------
Total 778 778
================= ===============
*T
In December 2004 the Company entered into an agreement with the then
shareholders of ZAO Begun to purchase 25% plus 1 share of ZAO Begun for $750,000
and an option to purchase an additional 25% of the shares. The purchase was
completed in March 2005 but the option has yet not been exercised. The majority
shareholder of ZAO Begun has an option to sell an additional 50% minus 1 share
in the event that the Company exercises the option. The Company spent an
additional $21,000 on completing the transaction.
Dividends are declared by ZAO Begun based on profits generated and not at any
set rate.
ZAO Begun is treated as an investment as the Company has no significant
financial or operational influence over the company. Dividend income received
from ZAO Begun is included in other income.
It is not practical to determine the fair value of this investment, other than
to state that fair value is believed by management to significantly exceed the
cost at which the investment is included in these financial statements due to
the dividends received to date and therefore it is not possible to forecast
dividend yield from the Company.
9. Revenue and Other Income
Revenue is comprised:
-0-
*T
1 January 2006 1 January 2005
to to
30 June 2006 30 June 2005
(reviewed) (reviewed)
--------------- ---------------
Internet 11,639 5,198
Television 2,154 962
Mobile Value Added Services 1,324 1,868
--------------- ---------------
15,117 8,028
=============== ===============
*T
-0-
*T
1 January 2006 1 January 2005
to to
30 June 2006 30 June 2005
(reviewed) (reviewed)
--------------- ---------------
Barter included in revenue: 514 -
--------------- ---------------
Other income �Euro � dividends from ZAO Begun 684 -
--------------- ---------------
Interest income 569 -
--------------- ---------------
*T
Periodically, the Company engages in barter transactions for marketing or other
services. Barter revenue (revenue from advertising time provided in exchange for
services) is recognized only if the services received are of a dissimilar nature
and if the revenue has economic substance and can be reliably measured.
Exchanges of similar advertising services are not recognized as revenue.
Revenue from barter transactions is recognized at the fair value of services
received, adjusted by the amount of any cash transferred.
If Rambler Companies enter into a barter transaction where dissimilar
advertising services are exchanged then revenue is measured at the fair value of
the advertising services provided, in accordance with Standing Interpretations
Committee (�Euro �SIC�Euro ?) 31 �Euro �Revenue �Euro � Barter Transactions Involving Advertising
Services�Euro ?.
10. Operating expenses
Operating expenses comprise:
-0-
*T
1 January 2006 1 January 2005
to to
30 June 2006 30 June 2005
(reviewed) (reviewed)
---------------- ---------------
Labour 6,494 4,324
Content and transmission 1,569 885
Commissions and partner fees 2,031 2,143
Management charge - -
Rent 552 429
Legal and professional 1,055 438
General expenses 671 325
Share Options 88 58
Depreciation 645 546
Amortisation 109 103
Marketing and advertising 1,356 368
Other 376 559
---------------- ---------------
Total Operating expenses 14,946 10,178
================ ===============
*T
11. Segmental Information
The segmental results for the six months ended 30 June 2006 are as follows:
-0-
*T
Internet Services TV Mobile VAS Total
----------------- ------------- --------------- ---------------
Total Revenue 12,323 2,154 1,324 15,801
Operating expenses and
overheads (9,391) (3,813) (1,742) (14,946)
----------------- ------------- --------------- ---------------
Net profit/(loss)
before interest, tax
and minority interest 2,932 (1,659) (418) 855
================= ============= =============== ===============
*T
The segmental results for the six months ended 30 June 2005 are as follows:
-0-
*T
Internet Services TV Mobile VAS Total
----------------- ------------- --------------- ---------------
Total Revenue 5,198 962 1,868 8,028
Operating expenses and
overheads (5,012) (2,514) (2,652) (10,178)
----------------- ------------- --------------- ---------------
Net profit/(loss)
before interest,
taxation and minority
interest 186 (1,552) (784) (2,150)
================= ============= =============== ===============
*T
12. Minority interest
-0-
*T
Total
--------------
As at 1 January 2006 23
Arising on purchase of Price.ru (111)
Purchase of minority interest of Infoproject 44
Share of results of OOO Business-Studio for the six
months 2006 (49%) (4)
Share of results of Price.ru for the six months 2006
(49%) 74
--------------
As at 30 June 2005 26
==============
*T
13. Profit and loss per Share
Profit/(loss) per share has been calculated as follows:
-0-
*T
2006 2005
Net profit/(loss) 2,407 (2,334)
Issued shares 15,017 14,976
------------ -------------
Profit/(loss) per share USD 0.16 USD (0.16)
============ =============
Fully diluted profit (loss) per share has been calculated as follows:
Net profit/(loss) 2,407 (2,334)
Issued shares 15,017 14,976
Shares over which options have been issued 343 315
------------ -------------
15,360 15,291
------------ -------------
Fully diluted profit/(loss) per share USD 0.16 USD (0.15)
============ =============
Weighted average number of basic and diluted
shares 14,966 13,611
*T
14. Share Capital
The share capital of the Company at the balance sheet date expressed in USD (not
thousands) is comprised as follows:
-0-
*T
2006 2005
------------ -------------
------------ -------------
Authorised ordinary shares of USD 0.01 each (20
million shares) 200,000 200,000
------------ -------------
Issued and fully paid share capital ordinary
shares of USD 0.01 each 150,165 149,757
------------ -------------
*T
15. Acquisitions
Price.ru
In January 2006, the Company acquired a 51% interest in Price Express, a leading
Russian price comparison internet company.
16. Post Balance Sheet Events
Purchase of Damochka.ru and BannerBank
On 18 July 2006 the Group executed a share sale and purchase agreement with
eHouse Holding for the purchase of 51% of a leading Russian social network
internet company Damochka.ru and 51% of the online banner exchange company
BannerBank. The Group retains the option to acquire the remaining 49% of both
companies for three months.
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