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MTG performing well in tough conditions

Modern Times Group (MTG) CEO Hans-Holger Albrecht said the company is in very good shape to “navigate through a very tough environment”.

Albrecht made the comment during a conference call announcing the company’s second quarter results, which saw sales up 8% year-on-year to SEK3.6bn (€334m). The company’s Viasat Broadcasting arm contributed SEK2.8bn, also up 8% year-on-year. Albrecht said market conditions were a fundamental stress test of every company’s business models, adding that MTG was well placed to ride out the “worst recession”, helped by the fact that over half of the company’s revenues coming from businesses that doesn’t rely on advertising. “Our pay-TV business is proving to be highly resilient to current market conditions and we have even seen ARPU increase during the period,” he said.

The company’s Nordic pay-TV business saw net sales increase by 10% year-on-year to SEK1bn during the quarter, with operating income reaching SEK179m. The company is seeing growth in its IPTV operations, with the addition of 18,000 subscribers during the quarter, giving it a total of 112,000. Overall, premium subscribers in the Nordic region reached 778,000, up 28,000 after the company lost 18,000 DTH subs. The number of subscribers with Viasat Plus DVRs increased by 5,000 to 127,000, to represent 19% of the premium DTH subscriber base. The company added 9,000 new multi-room subs, giving it a total of 186,000.

In central and eastern Europe, Viasat’s Baltic and Ukrainian DTH satellite pay-TV platforms added 25,000 net new premium subscribers year-on-year, but the combined premium subscriber base fell quarter-on-quarter due to higher churn levels in the Baltics as a result of the prevailing economic conditions. The wholesale mini-pay business added a further 10 million subscriptions year-on-year and 2.4 million subscriptions quarter-on-quarter to break through the 40 million subscriber mark for the first time.

Operating income for the quarter was SEK34m, up from SEK25m a year earlier. Albrecht said the “weak macro environment” in the region, was increasing churn and reducing new acquisitions but added that “the mini-pay business continues to perform beyond expectations.”