Chris Dziadul analyses MTG’s latest results
Results published by Sweden’s Modern Times Group (MTG) earlier this week only serve to confirm the increasingly important role Central and Eastern Europe (CEE) now plays in its overall strategy.
Sales in the region for Viasat Broadcasting are certainly growing, amounting to 24% in Q2 2007 as opposed to 19% a year. The EBIT figure, when Russia’s CTC Media is factored in, is even more impressive at 29% (23%).
The real successes for MTG in the region are to be found in the Baltic Republics, Russia and Hungary. In the terrestrial sector, Viasat now finds itself in an extremely strong position in Estonia, Latvia and Lithuania, its TV3 and second channels (3+, 3+ and Tango TV respectively) claiming an overall commercial viewing share of 40.3% in the 15-49-age group in H1 2007. The Baltic Republic DTH operation meanwhile had 117,000 subscribers at the end of June, or over twice the number (50,000) 12 months earlier.
The company also goes from strength to strength in Russia, both with its regional station DTV and CTC Media group. Although the latter’s latest results will only be released at the end of this month, it has already provided full year guidance for consolidated revenues of up to $500 million (€364.4 million).
In Hungary, on the other hand, Viasat 3 appears to be holding its own in market still clearly dominated by the two national commercial stations RTL Klub and TV2.
The really tough nut to crack is the Czech Republic, where Prima TV goes head-to-head with CME’s TV Nova, 13 years after its launch still one of the most successful commercial stations in the region. In conditions MTG describes as difficult, TV Prima saw a 17% year-on-year decline in sales in the second quarter.
Elsewhere, MTG is inching its way forward in Slovenia, where it also faces the well-established market leader CME, and is only just starting to find its feet in the Balkans through the Balkan Media Group (BMG). Its mini pay-TV operation meanwhile continues to grow rapidly, posting just over 23 million subscriptions in the region as a whole at the end of June.
While further acquisitions are probably on the cards, so, too, are challenges in what is becoming an increasingly competitive marketplace.
