Modern Times Group (MTG) has reported Q2 sales of SEK 4,328 million, up from SEK 4,155 in the last quarter, and operating income of SEK 472 million. The Scandinavian broadcaster reported total net income of SEK -674 million and total basic earnings per share of SEK -10.70, including net income from discontinued operations of SEK -1,002 million.
Jørgen Madsen Lindemann, President and CEO commented: “Our products are now more broadly available than ever before and showed further good traction in Q2 with profitable growth for our Nordic and International entertainment businesses, as well as for the whole Group. MTG Studios also delivered a significant profit improvement. Video consumption continues to grow and move more online, on mobile and on demand, and our group-wide digital sales increased by 2.5 times. We are now not only the leading digital entertainment player in most of our markets, but also a global leader in key digital categories such as esports and MCNs.
Both our Nordic and International entertainment operations delivered organic sales growth, with Bulgaria again top performing with over 20 per cent total growth and more than 60 per cent digital growth. Furthermore, the increase in group profits reflected the cost saving initiatives that we have implemented, and was achieved despite the ongoing FX headwinds and content cost inflation. The performance of our traditional businesses enables us to invest into the growth of our digital products and services that are proving so popular with consumers.
We have adjusted prices as we have added even more content to our Viasat and Viaplay offerings, and Viaplay delivered another high growth sales quarter. We are commissioning more and more original productions for Viaplay; we are about to launch the Viafree digital platform across Scandinavia and provide free streamed video content; we will show exclusive coverage of the Rio Olympics in Sweden next month on all our platforms, as well as in VR and Ultra-HD for the first time; we are launching new premium sports channels in Sweden on the back of the new sports rights we have acquired; and we have launched the world’s first 24/7 dedicated eSports TV channel that we will make as widely available as possible to the world’s 250 million esports fans and more than 2 billion gamers. The multi-year partnerships deals that we have signed with leading distributors like Telenor in the Nordic region demonstrate the relevance and value of our products to consumers, and the importance of the investments that we are making in the long term development of our offerings.
We completed the sale of our shareholding in CTC Media in Q2 and have now withdrawn entirely from traditional broadcasting in the CIS region. As part of our ongoing portfolio optimisation, we have also signed an agreement to sell our free-TV and production businesses in Ghana and Tanzania, subject to local regulatory approvals. We are instead focusing on investing further in the expansion of our digital video businesses, while having also paid our highest ever cash dividend in the quarter.
Our objective remains to accelerate our sales growth and increase our operating profits for the full year. Q3 sales are expected to be up again compared to the same period of last year, but profits will be down as we see the impact of the new and renewed sports rights in the Nordics in particular, as well as the ongoing adverse FX effects. “