TV investment weighs heavily as Telia recovers ground

Nordic telco Telia’s investment in TV and media assets once again weighed heavily on its latest quarterly financial numbers, despite resilience elsewhere that enabled the company to grow. Its overall revenue pie.

CEO Allison Kirkby accepted that TV and media had faced “a challenging quarter” with revenue and adjusted EBITDA each falling by about 30%.

While viewership of flagship channels TV4 in Sweden and MTV in Finland rose, the company suffered from the loss of advertising revenue and the absence of premium sports competitions.

The cancelled and postponed sport events and seasons led to both lower revenues and a lower amortization of sports rights in the second quarter, with a subsequent impact on EBITDA.

Telia carried out an impairment test on its TV and media assets as of June 30, but found that so far there was no need for an impairment on the assets.

Telia’s former Bonnier Broadcasting TV and media assets – TV4, MTV and pay TV outfit C More – saw revenues plummet b 30.6% on a like-for-like basis to SEK1.686 billion (€163 million), with ad revenues down during the crisis and pay TV sports subscription revenues falling because of the lockdown.

Adjusted EBITDA for the TV segment fell by 30.2% to SEK311 million.

Kirkby said that “responding to our viewers, and their changing habits and interests, will be key to returning our TV and Media unit to sustainable profitable growth”.

In terms of fixed line TV subscribers, Telia Sweden had 901,000 at the end of June, up 5.5% due to the inclusion of about 40,000 subscribers not previously accounted for.

In Finland, TV subscribers rose by 0.7% to 578,000 while in Norway they dropped b 3.5% to 475,000.

Telia’s TV base in Lithuania and small TV base in Denmark grew while its base in Estonia fell.

Telia said that even direct subscription video-on-demand numbers fell by 29,000 during the lockdown.

In total, the negative service revenue impact overall of the COVID-19 crisis on the company was estimated to be around SEK1.0 billion and the negative impact on EBITDA as well as on operating income was estimated to be around SEK0.5 billion for the second quarter.

Overall, Telia saw revenues rise 2.8% to SEK21.8 billion, but like-for-like sales fell by 5.9%.