Central European Media Enterprises Ltd. (NASDAQ:CETV) Q2 2018 Earnings Conference Call - Final Transcript
Jul 24, 2018 • 09:00 am ET
Hello, my name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Central European Media Enterprises Second Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remark, there will be a question-and-answer period. (Operator Instructions) As a reminder, this conference call is being recorded today, July 24, 2018.
It is now my pleasure to turn the floor over to Mark Kobal, Head of IR at CME, who will be your moderator today. Mr. Kobal, you may begin your conference.
Thank you, Michelle. Good afternoon, and good morning, everyone, and welcome to CME's Second Quarter 2018 Earnings Conference Call. We issued our earnings press release earlier today, a copy of which is available on our website, cme.net, along with a brief presentation that we will refer to you during this call. On the call today are Michael Del Nin and Christoph Mainusch, Co-CEOs of CME; David Sturgeon, CF; and Daniel Penn, General Counsel.
(Forward-Looking Cautionary Statements)
During this call, we will also refer to certain financial information that is not in US GAAP. A description of these non-GAAP financial measures, as well as reconciliations to the most comparable GAAP measures, is available on our website in the appendix to the earnings call presentation. Additional information may also be found in Note 19 to our financial statements in the Form 10-Q.
Lastly, following the previously announced agreement to sell our operations in Croatia and Slovenia, these businesses are classified as held for sale and presented as discontinued operations for all periods. Our discussion today relates to our continuing operations in the four remaining operating segments.
And with that, I'll hand the call over to Michael and Christoph.
Michael Del Nin
Thanks, Mark, and thanks to everyone for joining the call. There are several topics for us to cover today, so let's quickly hit the headlines before getting into the details.
In terms of our financial performance, the second quarter finished right in line with our expectations, as indicated on our last earnings call. Our outlook for the rest of the year is also unchanged, and we continue to expect that growth and profitability will accelerate sharply in the second half of 2018, leading to another full year of outstanding results and strong free cash flow generation. We made progress on the asset divestitures, receiving regulatory approval to complete the sale of our Croatian business, which we expect will happen in the coming days. The proceeds from that transaction will be used to immediately pay down our debt. And pro forma for the sale, the Company will have the lowest amount of gross debt on its balance sheet than at any point in the last decade. That allows us to reap additional benefits from the debt repricing that we put in place in April, setting us up to reduce our average borrowing rate to just about the lowest level that the Company has ever