Modern Times Group (MTG), which today reported improved revenues and profits for the fourth quarter and full year, has reached a deal to acquire 50 percent of Balkan Media Group (BMGL) from Apace Media for 11.6 million euros, granting it access to the Bulgarian market.
MTG will assume management control of BMGL with effect from the closing of the transaction. The total consideration of 11.6 million euros includes the buy-out of a minority shareholder in a subsidiary of BMGL. MTG also has an option to increase its stake in BMGL over the next five years.
BMGL’s assets include 100 percent of Diema Vision, Apace Internet Balkans and Apace Media Bulgaria; and 66 percent of Television MM and TV ERA. Diema Vision and Television MM own six TV channels in Bulgaria: Diema, Diema 2, Diema Family, Diema Extra, MM TV, and M2, which are broadcast through nearly 400 cable networks, covering almost 70 percent of the 3.1 million TV households in Bulgaria. Apace Internet Balkans is a soon to be launched online social networking community in Bulgaria. Apace Media Bulgaria provides central services. TV ERA is an Albanian-language terrestrial TV broadcaster in Macedonia. For the first half of 2006, BMGL posted revenues of 2.63 million euros and an operating income of 340,000 euros. The channels generate the bulk of their revenues from subscription sales, with pay-TV revenues generated from fees paid by third-party cable and satellite broadcasters for the carriage of the packaged channels.
According to MTG, Bulgarian TV advertising brought in 75 million to 80 million euros in 2005, representing about two-thirds of the total ad market.
Hans-Holger Albrecht, the president and CEO of MTG, commented, “This transaction further extends our reach in Eastern Europe, into an emerging EU country with a fast developing economy and attractive media landscape. We have to date been present in the Balkan markets through the sale of our Viasat pay-TV channels to third party broadcasters, which has enabled us to ana*yze and explore new opportunities in the region. This investment provides us with critical mass and a scale bridgehead for further expansion in South Eastern Europe. There are significant operating synergies with our other broadcasting operations, and we will invest further to increase penetration levels, program ratings and market shares. We will utilize our pan-regional presence to facilitate the development of these very promising operations. This move not only consolidates and strengthens our pay-TV presence in the region, but also gives us access to high growth new advertising markets. Our intention is to create the number one Balkan TV channel operator.”
MTG’s fourth quarter revenues were up 18 percent to SEK2.9 billion, with Viasat Broadcasting’s net sales up 14 percent to SEK2.3 billion. Profit for the quarter was SEK316 million, up from last year’s SEK288 million. For the year, MTG’s revenues rose 27 percent to SEK10.1 billion, with Viasat’s up 29 percent to SEK8.3 billion. Net profit for the year grew from SEK1.2 billion to SEK1.5 billion. Albrecht said of the company’s results: “It is over two and a half years since we provided our five year strategic objectives in June 2004, so we are now halfway through the timeline. We are outperforming the target of doubling the size of Viasat Broadcasting with annual sales for the division having now grown by 78 percent since the end of 2003. We have also achieved more than 15 percent operating margins in each of our three core broadcasting segments and a 17 percent full year margin for Viasat Broadcasting, whilst 40 percent of the group’s operating profits are now derived from Central and Eastern Europe.”
Albrecht continued: “Whilst the pay-TV and Eastern European operations continued to perform ahead of expectations, the results for our free-to-air business in Scandinavia were weaker than anticipated. We are addressing the ratings softness in Sweden by reviewing and improving every step of the programming acquisition, scheduling, sales and marketing process, in order to be able to regain the market position necessary to capitalize on advertising market growth and penetration increases.”
Ce misto ar fi sa vina si la noi suedezii de la MTG.... Pana acum, vad ca in loc de blonzi, vin din astia mai negriciosi, citeste turci. Nu ca as avea ceva cu ei, dar si standardele lor sunt diferite fata de cele nordice.
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