Broadcast strengthens XFMedia's Q3 results

Beijing - Xinhua Finance Media (XFMedia) has recorded a 25% year-on-year increase in its broadcast business, but its print arm suffered a hefty blow, down 50% in the third quarter of 2008.

Despite operating in a challenging economic environment, net revenue for the third quarter of 2008 was US$51 million, up 25% year-on-year from $40.7 million in the same period last year.

Net revenue for its Broadcast Group was $18.1 million, up 68% from $10.8 million in the third quarter of 2007 and up 30% from the second quarter of 2008.

Net revenue for its Advertising Group increased 25% from $24 million in 2007 to $30 million.

XFMedia's net revenue for its Print Group was the hardest hit, down 50% year-on-year from $3 million. A report from the company attributed the decrease to heavy TV spending during the Beijing Olympics.

Fredy Bush (pictured), chief executive officer, said that its broadcast business proceeds to contribute the largest growth as well as the highest margins.  

"We continue to sharpen our focus toward exclusive sports programs and the proper access to showcase this programming.  The China media industry is still very fragmented and nascent, but there is a significant and growing demand for a broad range of quality American sports programs."

She added that to be successful in China, one must have both the programs and access. "Programming is becoming king and access as key."

Bush said that during as the Beijing Olympics took place, it was challenging for most of the non-official Olympic media and non-Olympic sponsors.  

"The recent global economic downturn poses further challenges, and we will not be immune to the impact of these circumstances.  However, by leveraging our strong, fundamental platform, we continue to integrate ourselves to achieve streamlined cost savings across our various operating units," she said.

Gross profit for the third quarter of 2008 was $18.7 million, up 8% year-over-year from $17.4 million in the third quarter of 2007 but down 11% sequentially from $21.1 million in the second quarter of 2008.  

XFMedia estimates its net revenue for the fourth quarter of 2008 will range between $48 million to $50 million.

Due to challenges in the current economic environment, the media company is revising its estimate of net revenue for the full year of 2008 to range from $185 million to $187 million, from previously forecasted range of $198 million to $208 million.