MTG lifted by Viaplay, highlights continued uncertainty on Russia

Modern Times Group’s (MTG) second-quarter performance was lifted by strong sales from its Viaplay on-demand offering and IPTV growth, which offset declines across its satellite and cable pay TV arms.

MTG said that UTH’s offer for its stake in CTC in Russia, which would deliver a “modest premium” to the July 2 closing price of its stock, was now being evaluated. However, it cautioned that talks were “at a relatively early stage and there can be no assurance that the CTC Media Board of Directors’ Special Committee will be successful in agreeing definitive documentation with UTH, or that such transaction will ultimately close”.

The sale of the CTC stake has been forced on MTG as a result of the country’s new media law, which limits foreign ownership of media companies to under 20%.

President and CEO Jørgen Madsen Lindemann said digital sales had grown by 30% and that the company would benefit from the rollout of programmatic advertising across its markets in quarters to come. Viaplay is expected top benefit from a raft of new partnerships  with companies including Apple TV, Nextgentel and 3.

Nordic pay TV turned in sales of SEK1.49 billion (€159 million) for the quarter, up 3% year-on-year at constant exchange rates, EBIT was flat at SEK185 million.

Pay TV in the emerging markets saw revenue growth of 12% to SEK303 million thanks to the consolidation of Trace, which helped lift wholesale mini-pay channel sales by 43 million subscriptions year-n-year, offsetting a decline in satellite pay TV, hit by the ongoing crisis in Ukraine.

Free TV sales in the Nordic markets were flat at constant exchange rates, turning in SEK1.08 billion, while EBIT rose slightly from SEK200 million to SEK208 million. Free TV sales in the emerging markets grew by 9% to SEK739 million, with EBIT of SEK134 million, lifted buy strong growth in Bulgaria and relatively stable performances in the Czech Republic and the Baltic states.