Modern Times Group Q2 2017 Financial Results

Modern Times Group’s Q2 2017 financial results demonstrate a successful strategic pivot toward becoming a global digital video entertainment provider. The company reported a 5% increase in organic sales and a 9% rise in profit, driven by robust performance in its Nordic Entertainment division and significant digital expansion. During this period, the company finalized the divestment of its Czech operations, increased its stake in InnoGames to 51%, and announced the acquisition of Kongregate, signaling a clear commitment to scaling its digital and gaming footprint.

Performance across business segments was varied. Nordic Entertainment remained the primary growth engine, with organic sales rising 8% and EBIT increasing 15% due to higher pricing and cost transformation savings. Conversely, MTG Studios saw a 1% organic sales increase, hampered by weakness in the non-scripted production market. The MTGx division experienced a 70% surge in sales, largely attributed to the consolidation of InnoGames, though it recorded an EBIT loss of SEK 53 million as the company absorbed acquisition costs and invested in future growth. International Entertainment reported 5% organic growth, though EBIT declined by 7% due to specific regional challenges and investments in new digital platforms.

The company remains on track with its cost transformation program, targeting total savings of approximately SEK 600 million by the end of 2017. Management maintains a positive outlook, anticipating that the second half of the year will benefit from a heavy esports event calendar and new commercial agreements. By prioritizing digital content and streamlining operations, the company aims to sustain long-term profitability and deliver shareholder value while navigating the transition from traditional broadcasting to a digital-first entertainment model.