MTG: cost-cutting boosted half-year profits

The programme of cost cutting at Modern Times Group has helped boost its half-year profits, the company said this morning.

The pan-European free and pay TV company added that it has tweaked the price of its pay offerings and added more content, and the performance of its traditional businesses are allowing it to sink more into its digital operations.

“The increase in group profits reflected the cost saving initiatives that we have implemented, and was achieved despite the ongoing FX headwinds and content cost inflation,” said MTG CEO and president Jørgen Madsen Lindemann.

“The performance of our traditional businesses enables us to invest into the growth of our digital products andservices that are proving so popular with consumers. We have adjusted prices as we have added even more content to our Viasat and Viaplay offerings, and Viaplay delivered another high growth sales quarter.”

In on demand, MTG is commissioning more original content for its Viaplay service and is about to roll out a free streaming product, Viafree, in Scandinavia.

It has offloaded the CTC operation in Russia and pulled out of the CIS region, which is beset with regulatory challenges. It is also selling its free TV operations in Ghana and Tanzania.

The divestments come against a background of wider cost-cutting and head count reductions as MTG seeks to refocus on digital.

Looking ahead Lindemann said he expects revenues to increase in the next quarter but profit to be down as the increased cost of renewed sports rights kicks in.

Sweden-listed MTG recorded half yearly revenues of SEK8.15 billion compared with SEK7.85 billion a year earlier. Profit for the first half of 2016 was SEK448 million against SEK524 million in the same period in 2015.