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MTG sees strong pay growth, takes hit from Bulgarian operations

Nordic and pan-European free and pay-TV group Modern Times Group (MTG)’s fourth quarter and full-year performance was boosted by strong performances from its Nordic and emerging markets pay-TV businesses.

However the company’s bottom line was hit by an impairment charge of approximately SEK3.4bn (€340.5m) relating to the goodwill balance of its Bulgarian broadcasting assets due to the economic deterioration in that country. MTG now owns 95% of an enlarged Nova Televizia group comprising all its Bulgarian assets.

MTG posted net sales of SEK4.076bn for the fourth quarter, up 6% year-on-year. Nordic pay-TV contributed SEK1.093bn, up 8%. Operating income was SEK192m, down 4% year-on-year. Premium subscribers numbered 823,000, up from 802,000 in the third quarter, with growth evenly split between satellite and IPTV. Basic DTH satellite subscribers fell by 3,000 to 45,000. Annualised ARPU from pay-TV grew by 9% year-on-year to SEK4,435.

Pay-TV in the emerging markets of the Baltic states and Ukraine contributed net sales of SEK225m for the quarter, up 11%, and SEK875m for the year, up an impressive 33%. Operating income in the fourth quarter was SEK61m, up 22%. Premium DTH subscribers in the region numbered 216,000 in December, up 9,000 on the previous quarter. Basic subscribers numbered 24,000, up 2,000. And mini-pay subscriptions numbered 40.778 million, up from 39.62 million in the previous quarter.

Free TV in the Nordic region posted sales of SEK1.083bn for the fourth quarter, up 7%, while free TV in emerging markets contributed revenue of SEK652m, down 14%.

MTG posted a pre-tax loss of SEK2.722bn for the quarter, compared with a profit of SEK647m for the previous year’s fourth quarter. The company posted operating income of SEK624m, up from SEK615m excluding associated company income and non-recurring items.

For the full year, MTG posted net sales of SEK14.173bn, up 8% year-on-year, and a pre-tax loss of SEK1.625bn (compared with a profit of SEK3.61bn for 2008).