MTG Delivers Solid Q4, Eyes Impact of New Russian Ad Laws

STOCKHOLM: Modern Times Group (MTG) has reported revenues of SEK4.4 billion ($533 million) for its fourth quarter, compared to the year ago's SEK4.1 billion ($497 million).

Full-year 2014 revenues were SEK15.8 billion ($1.9 billion) compared with SEK14.1 billion ($1.7 billion) a year prior. EBIT profit was up in the most recent quarter, reaching SEK468 million ($57 million) from the SEK461 million ($56 million) a year earlier. Full-year EBIT profit of SEK1.27 billion ($154 million) was down from the SEK1.3 billion ($157 million) posted in 2013.

Jørgen Madsen Lindemann
, MTG's president and CEO, commented: "Our fourth-quarter results again delivered a combination of organic and acquisition-led growth to generate higher sales and profits. Our strong cash flow generation and overall financial position are reflected in the proposed 5 percent higher annual dividend payment of SEK11 per share, which is equivalent to a 57 percent pay-out ratio.

"We are delivering on our strategic plans and moving towards our objective of being the leading digital entertainment company in each of our major markets. Our Nordic broadcasting business again delivered higher sales and profits, as the growth in our online businesses more than compensated for lower linear viewing levels and declining advertising markets. The emerging markets businesses grew their sales on a combined basis but higher profits in the free-TV business were offset by negative pay-TV earnings impacts."

Regarding the new law prohibiting the sale of advertising on pay-TV channels in Russia, which has taken effect from the beginning of 2015, Lindemann
 said: "An amendment to the law that would allow advertising on pay-TV channels with 75 percent Russian content is now pending Presidential signature. We are continuing to explore the options available to our Russian operations and holdings in order to comply with the amendments to the Russian law regarding foreign ownership of Russian mass media companies from the beginning of 2016. We are working with a range of potential solutions, in order to best protect the interests of the stakeholders in these entertainment businesses that we have built into some of the most popular in Russia."