MTG Reports Revenue, Profit Gains

STOCKHOLM, April 24: For the first quarter of this year,
Modern Times Group has reported an 11-percent increase in revenues to SEK 2.6
billion, with profit up 4 percent to SEK 316 million.

At Viasat Broadcasting, meanwhile, revenues rose 11 percent
to SEK 2 billion, with operating income up 5 percent to SEK 481 million.

Hans-Holger Albrecht, the president and CEO of the company,
noted: “Another quarter of double digit sales growth, increasing investments,
and an operating margin of 18 percent, demonstrate the group’s ability to
balance healthy growth with sustained profitability. This was the best first
quarter result in the group’s history. 2007 is a year of investment and these
investments are being made in order to enable us to continue to generate growth
across the business in the medium and longer terms.”

Albrecht continued: “In line with our strategy, we have
continued to build our position as Scandinavia’s leading media power house by
increasing the combined commercial share of viewing of our channels. We were
however impacted by softer advertising markets across the region in a
seasonally weaker period of the year, as well as adverse currency translation
effects. There are, however, encouraging signs that the measures that we are
taking at TV3 Sweden are gradually having the desired effect. The impact of the
now imminent analogue terrestrial network switch-off in Sweden is diminishing,
with the result that, whilst we still see increasing penetration levels for our
free-to-air channels, subscriber acquisition levels have substantially slowed.
We are however investing in future growth by exploiting new technologies,
embracing new distribution platforms and adding new channels, in order to drive
ARPU and further strengthen our market leading premium channel package
offerings. At the same time, we are maintaining healthy margins, and the volume
sales impact of the digitalization of the terrestrial networks in Norway and
Denmark is yet to come.”

Albrecht concluded: “The Eastern European operations
delivered another quarter of combined strong growth with Russia leading the
way. The exponential growth we witnessed in the Czech Republic in 2006 has
slowed, as expected, and we are now focused on delivering ratings growth to
support further market share gains. Our return on capital employed of 30
percent demonstrates the success of the investments that we have made, and we
retain the balance sheet flexibility to invest further in the Group’s expansion
moving forward.”