Modern Times Group (MTG) reported strong first quarter results with 9% organic growth and profits up 73% as it prepares to split the business into two by spinning off Nordic Entertainment Group.
For the January-March period MTG reported record Q1 sales of SEK 4,674 million (€450 million) compared to SEK 3,704 million a year earlier, with 9.2% organic growth.
Earnings before income and tax (EBIT) climbed 73% year-on-year to SEK 237 million, while net income increased 74% to SEK 146 million.
MTG said that Q1 was its seventh consecutive quarter of more than 5% organic sales growth, attributing this to the investments it has made in its content portfolio and digital products.
Digital sales were up 88% in the quarter and accounted for 35% of total sales. Within MTG’s Nordic Entertainment division, higher sales and profits were largely driven by digital service Viaplay.
MTGx – the digital division focused on eSports, online games and digital video – saw its sales increase 226% on a reported basis and 27% on an organic basis, with growth across all three verticals.
“Today we are the number one integrated entertainment provider in the Nordics, with the best and broadest content offering, and world-class streaming services in Viaplay and Viafree,” said MTG president and CEO, Jørgen Madsen Lindemann.
“We have also firmly established MTGx as one of the most exciting players in the digital entertainment space. We are the world’s leading eSports company and we have proven concepts in the online gaming space – two industries that are global by nature.
“The Nordic Entertainment and MTGx businesses and teams are ready to stand and succeed separately, which is why we are now taking the next step by preparing to split MTG into two separate listed companies
“We are big believers that this will accelerate the development of both companies and create additional shareholder value through a sharpened strategic focus, more flexibility, and faster decision making.”
MTG announced last month that it is to split into two separate businesses – MTG and Nordic Entertainment Group. MTG will focus on eSports and digital video content, while Nordic Entertainment Group will comprise MTG’s current Nordic Entertainment and MTG Studios units, as well as Splay Networks.