Mar 2008 Financial News

OCM Releases Year End Results

Mar 04, 2008

One Caribbean Media Limited
Results for the Year Ended December 31, 2007

Earnings Per Share
For the Year Ended December 31, 2007, One Caribbean Media Limited (OCM) reported Earnings Per Share (EPS) of $1.33, up a marginal 2 cents or 1.53 per cent on the comparable EPS for fiscal 2006. These results fell below our expectations by approximately 5 per cent. The Chairman has stated that the Group’s Income fell below projections due to losses of $3 million from ICC Cricket World Cup 2007 and unanticipated increased newsprint and restructuring costs incurred.

Financial Highlights (YE07 on YE06):
• Revenue up 7.68 percent to $482.3 million.
• Marketing Expenses up a significant 42.69 per cent to $5.6 million.
• Operating Profit up a marginal 2.21 per cent to $115.5 million.
• Interest Income up 32.50 per cent to $3.9 million.
• Profit After Taxation up a marginal 1.97 per cent to $88.6 million.

Financial Highlights (Q407 on Q406):
• Revenue up 13.76 per cent from $127.3 million to $144.8 million.
• Marketing Expenses up 294.62 per cent to $2.4 million.
• Operating Profit down a marginal 0.20 per cent to $48.1 million.
• Interest Income down 75.77 per cent from $0.7 to $0.2 million.
• Profit After Taxation down 2.24 per cent from $36.5 million to $35.6 million.
• EPS down 1.82 per cent from 55 cents to 54 cents.

Acquisitions
On November 21, 2007, the Group took operational control of Hott 93 (Trinidad), Gem Radio (Antigua, Monsterrat and St. Kitts) and The Wave (St. Lucia). Thus, this would have contributed to the last five weeks of fiscal 2007.

Dividends
The Directors have agreed to a final dividend of 47 cents which brings the total dividends paid for the year to 72 cents, the same as the previous financial year.

Revenue Events for Fiscal 2008
• Olympics 2008
• Local Elections

Outlook & Recommendation
OCM last closed at a price of $17.37 on the local exchange. For fiscal 2008 we are anticipating increased revenue from the above events in addition to greater contribution from the recently acquired radio stations. However at this time we will maintain a conservative forecast of $1.40 EPS for FY08. This translates into a P/E multiple of 12.41 times at the current price. Also, using a multiple of 14 times and the forecasted EPS of $1.40, this share has an expected return of approximately 13 per cent or a target price of $19.60. Thus, we continue to recommend a BUY.

Gia Singh
WISE Equity Research Team