Modern Times Group (MTG) is to include net non-recurring income statement charges totaling SEK154 million (€17 million) in its Q2 financial results, mainly due to the difficult situation in Ukraine, where it operates the satellite pay-TV platform Viasat Ukraine.
The charges, which will be reported together as a separate line item within EBIT, will include SEK160 million non-cash net impairment related to the Ukrainian satellite pay-TV platform, SEK70 million of organisational restructuring and other costs, and the SEK76 million net gain from the recently completed sale of Zitius in Sweden.
MTG says it has taken the decision to write down 100% of the intangible assets (primarily goodwill) arising from its 85% participation in Viastrong Holding AB, which operates the Viasat Ukraine satellite platform through Vision TV LCC.
It adds that the decision has been made due to the uncertain economic outlook in Ukraine and the significant devaluation of the Ukrainian hryvnia. The operation, which is included in the group’s Pay-TV Emerging Markets segment, accounted for less than 1% of full year 2013 Group net sales.
MTG notes that the organizational changes will yield annual cost savings of around SEK40 million.
Jørgen Madsen Lindemann, MTG president and CEO, commented: “The impairment of the Ukrainian assets reflects the current situation, but make no mistake that we remain committed to the operations and see substantial long term potential for the business, not least given the scale of the country and the upcoming TV digitalisation process. The sale of Zitius in Sweden has generated a healthy return on investment for us, and the broader changes we have made are all about optimising our set-up so that we can continue to invest in the Group’s growth and development.”
