MTG upbeat after ‘cost transformation initiatives’

Modern Times Group (MTG) reported record sales in Q1 and an increase in operating profits before items affecting comparability (IAC) following “cost transformation initiatives”.

The Scandinavian company said that a 3% year-on-year increase in revenue to SEK3.83 billion (US$1.04 billion) reflected high Viaplay subscriber intake, the addition of its new eSports and multi-channel network businesses, and continued high underlying growth in its international entertainment operations.

“Operating profits before IAC were up as our cost transformation initiatives and the operating leverage in the international entertainment businesses mitigated the ongoing adverse FX effects, investments in the new MTGx businesses, and a material step-up in sports costs,” said MTG president and CEO, Jørgen Madsen Lindemann.

Operating income came in at SEK159 million, however net income from continuing operations was down 27% year-on-year to SEK119 million.

MTG finalised a deal for Cologne-based e-sports specialist, Turtle Entertainment, last September. In its earnings, the company said that 2015 was a “breakthrough year for eSports” and that “the industry continued its rapid growth in revenues”.

“Turtle is now available on multiple streaming platforms, and the Turtle and DreamHack events so far in 2016 are breaking all records. eSports is not the only digital product with global potential in the Group, now that Zoomin.TV and Splay are creating new web stars and distributing content all around the world,” said Lindemann.