Discovery hit by currency effects in third quarter

David Zaslav

Discovery was hit by currency effects in the third quarter, turning in revenues of US$1.557 billion (€1.412 billion), down 1% year-on-year.

Excluding currency effects, the pay TV broadcaster’s revenues grew 8%. Adjusted OIBDA was down 9% to US$576 million, and down 1% excluding currency effects.

Eight per cent revenue growth in the US was offset by a 9% decline internationally, due to the currency impact. US OIBDA growth of 4% was more than offset by a 21% decline from international networks.

US networks revenue growth was driven by distribution and advertising growth of 12% and 6% respectively. Excluding the consolidation of Discovery Family, distribution revenues grew 7% and total revenues grew 4% over the prior year’s third quarter.

Internationally, distribution revenues grew 8%, excluding the impact of the Eurosport acquisition and currency effects, mainly from increased subscribers and rates inLatin America as well as increased subscribers in CEEMEA.

Advertising revenues, excluding the impact of Eurosport, SBS Radio and currency, were up 12%, primarily due to higher volume and prices in Latin America and higher ratings, prices and volume in southern Europe.

Other revenues, excluding the impact of Eurosport, SBS Radio and currency, decreased US$2 million, primarily due to lower programme sales.

For the full year ending December 31, 2015, Discovery expects total revenue excluding currency effects to grow in the 9-10% range, Adjusted OIBDA excluding currency effects is expected to grow in the mid-single digit range.

Discovery upped its share buyback programme by US$2 billion in October, taking the remaining authorisation to US$2.4 billion, with an expiry date of 2017. The company has bought back 30% of its outstanding shares since the repurchase programme was authorised five years ago.

“Discovery’s unique portfolio of assets and global brands drove yet another quarter of strong worldwide viewership and financial results,” said David Zaslav, President and CEO of Discovery Communications.

“Discovery is like no other media company, propelled by our unmatched global infrastructure, local leadership, efficient global content model and sturdy position in the U.S., and we are confident in our ability to drive near and long-term growth and shareholder value.”