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Modern Times Group (MTG), the international entertainment broadcasting group, has reported Q2 operating income (EBIT) up to SEK 472 million (from SEK 465 million) when excluding non-recurring items of SEK -155 million and associated company income of SEK 117 million. Net sales up 13 per cent at constant FX and up 3 per cent on an organic basis.
Pay-TV Nordic and acquisitions dove revenue and earnings growth despite soft advertising markets and ongoing investments.
Commenting on the results and the group’s outlook, Jørgen Madsen Lindemann, President & Chief Executive Officer, said: “This quarter has again demonstrated the benefit of the investments that we have made. Not only have we delivered the highest quarterly sales in the Group’s history, but also higher operating profits than last year. Secondly, these results demonstrate the benefit of our uniquely integrated and balanced combination of on and offline advertising, subscription and content production businesses. This enables us to monetize rising video consumption levels, and capitalise on the shift from linear to on-demand viewing with our Viaplay, catch-up and broader digital businesses. MTGx is accelerating this development and our clear objective is to be the leading digital entertainment business in each of our scale markets.”
“Both Viaplay in the Nordics and our emerging market wholesale channel business performed well in the quarter, and our results were boosted by the content production business. TV advertising market development remains mixed but we grew our online advertising revenues in all markets. We continue to adjust our cost bases to the market development, and to maximize the earnings potential in our traditional businesses so that we can prioritise investments in future growth. This can be seen clearly in the performance of our combined Nordic businesses.”
“We continue to focus on delivering relevant experiences that engage and excite consumers around the world. This is why we have recently prolonged our exclusive rights to Denmark’s Superliga football for an unprecedented six further seasons; signed the new multi-year, multi-platform and pan-Scandinavian exclusive content acquisition deal with Sony; launched our TV1000 Russian Kino movie channel in Israel; and launched our advertising funded eSports service. The quarter ended with the completion of our acquisition of global youth media brand Trace, which expands our presence across all of Africa and to 131 countries in total, and reflects our focus on investing in businesses with relevant content, digital presence and geographical expansion potential.”
“We continue to expect higher sales and margin expansion in 2014 for the Nordic pay-TV business. The Emerging Markets pay-TV operations are growing and will also now include Trace’s results but, as said before, we are impacted by the devaluation of the Russian and Ukrainian currencies and we are currently analyzing the impact of Russia’s proposed ban on advertising on pay-TV channels from 2015. Advertising spending trends across our 11 free-TV markets are mixed but we will continue to adjust our investments accordingly and to grow our online shares. Finally, the demand for our own content is strong, and both Nice Entertainment and Trace will contribute to our development moving forward.”