Clear Channel Outdoor losses widen as UK billboard revenue declines

Clear Channel Outdoor's losses before income taxes widened 84.7% to $60.5m (£37.4m) in the first quarter, as international revenues were hit by foreign exchange movements and decreased billboard revenues in the UK and Italy.

Clear Channel Outdoor: UK billboard revenues have declined
Clear Channel Outdoor: UK billboard revenues have declined

According to Clear Channel Outdoor’s results for the first quarter of 2012, global revenues were $651.3m, (£402.6m) up 0.2% year on year. Clear Channel said excluding the effects of movements in foreign exchange rates revenues rose by 2%.

Although reported international revenues (including the UK) declined by 2% year on year to $371.1m (£229.4m) in the first quarter, Clear Channel Outdoor said revenues grew slightly if the effects of movements in foreign exchange rates were excluded.

Clear Channel said international growth in street furniture revenues across certain countries, including China, France and Australia, was partially offset by decreases in billboard revenues from various other countries, including the UK and Italy.

International operating expenses increased by $21m (£13m) during the quarter and included $18m (£11m) attributed to litigation in South America, higher costs associated with new contracts won during 2011, and spending on strategic initiatives.

Clear Channel uses OIBDAN as a measure of the business’ performance. This is defined as consolidated net income, adjusted to exclude non-cash compensation expenses such as income tax benefit, other income, equity in earnings of nonconsolidated affiliates, gain on marketable securities, interest expense, other operating income, depreciation, and amortisation and impairment charges.

International OIBDAN for the first quarter of 2012 was $22m (£14m), down 58% year on year. Clear Channel said excluding the increased expenses associated with the Latin American litigation, OIBDAN declined 22%.

The Americas division reported revenues of $280.2m (£173.2m) in the first three months of 2012, up 4% year on year. Clear Channel attributed the growth in the Americas' revenues to its digital investments and strong airport revenues.

The company made an operating loss of $8.6m (£5.3m) in the first three months of 2012, down from a $16.1m (£10m) operating profit in the same period of 2011.

William Eccleshare, global chief executive of Clear Channel Outdoor, said: "Clear Channel Outdoor Holdings has the financial strength and global assets to continue to deliver unmatched value to our clients.

"Street furniture drove our revenue growth internationally, especially in China, France and Australia. We will continue to develop and deploy our unique digital products and services in a way that will further strengthen our position around the world."

Eccleshare was promoted to global chief executive, from chief executive of Clear Channel Outdoor International, in January. Since then, the South American business has moved into the company's international segment.

Follow Maisie McCabe on Twitter @MaisieMcCabe


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