NENT Group ‘set for bigger losses’ in near term, but international prospects look good

Nordic Entertainment (NENT Group) is set to incur increased cumulative losses as it spends more on content to feed its international growth ambitions for streaming service Viaplay, but the company’s big international bet is likely to be justified, according to analysts at Berenberg.

Following NENT Group’s announcement that it was doubling its international subscriber outlook for this year, Berenberg highlighted that content costs are likely to rise to fuel growth in Poland, where Viaplay is set to launch on August 3, and the Netherlands, where the streaming service will launch next year.

Berenberg estimates that the increased spend on content, including premium sports rights such as the Premier League across nine markets and an upping of the number of originals the company will produce this year from 40 to 50, will lead to NENT Group incurring cumulative losses of SEK3.2 billion before it hits operating profit in 2025, up from the group’s own estimate of SEK2.5 billion.

The analysts said they expected NENT Group to. Up its own estimate of losses at its capital markets day in September.

NENT Group’s ambitious international growth target of reaching 500,000 subs this year, up from 250,000, is based on striking more distribution agreements on the model of the one announced this week with leading Polish cable operator Vectra, with “more agreements likely to be announced soon”, according to Berenberg.

The analysts said that the addition of English Premier League football to the Polish content line up next year gave “plenty of reason to be optimistic” about Viaplay’s long-term prospects in this market. They also believe that a similar high-profile sports line-up in the Netherlands will enable Viaplay to gain market share there.

Berenberg believes that NENT Group is also “on course” to hit its target of an additional 400,000 subs in its domestic market this year, having already added 240,000 in the first half.