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Nagra to divest SmarDTV as digital TV downturn takes toll on results

TV technology provider Kudelski Group, owner of Nagra, saw its profits take a hit from the slowdown of traditional TV activities, with operating income before restructuring costs dropping from US$113.5 million (€92 million) to US$48.1 million.

Net income, which was also hit by restructuring costs, plunged from US$88.5 million to US$2.7 million.

Kudelski overall saw its revenues from continuing operations rise by 7.1% to US$1.068 billion, driven by increased cybersecurity and public access sales.

Digital TV segment revenues grew by 4.2% to reach US$688.4 million, after a year in which Kudelski sought to streamline its digital TV operations to “seize new opportunities more effectively”, focusing on end-to-end offerings and integrating its Conax unit.

Kudelski’s results did not include its SmarDTV conditional access module and set-top unit, which is being treated as a discontinued operation. The group said it planned to “establish strategic partnerships with best-of-breed set-top box and conditional access module suppliers” involving a transfer of SmarDTV assets.

To reflect changes in the market, such as the growing adoption of cloud technology, Kudelski has changed its management structure, splitting the role of chief operating officer into two roles focusing on sales and marketing, and operations respectively.

Kudelski said it achived cost reductions of US$23.3 million in the TV segment last year with a further US$50-70 million targeted for this year.

Cybersecurity revenues meanwhile more than doubled, reflecting the consolidation of Dallas-based M&S Technologies, while revenues from Kudelski’s public access unit grew by 11.7% to US$361.3 million, Cybersecurity and public access now represent key growth opportunities for the company.

As over 56% of revenues are now deonomiated in dollars, with 47% being generated in the Americas Kudeslki changed from reporting in Swiss Francs to dollars as of January last year.