Modern Times Group (MTG) has released its Q1 2018 report. The Swedish entertainment group has reported a record level of sales totally 4,674m SEK (£394m) with organic growth up 9% and profits up 73%.
MTG reiterated plans to split the company into two parts. The split will likely be dependent on Danish telecom company TDC not buying the TV portion of MTG. As recently as March, MTG had been notified by the board of TDC that it had withdrawn its recommendation of the previously announced combination with MTG Nordics (MTG Nordic Entertainment and MTG Studio) and that it will no longer look to propose such a move to its shareholders.
MTGx (which will become MTG after the company’s split) sales were up 226% of which 27% was organic. MTGx accounted for SEK 952m (£98m) in revenue. Esports sales were up 32% and driven by a 70% growth in ESL’s revenues from own and operated events. MTG reported this helped mitigate lower white label revenues, which reflects the brand’s strategic focus on branded products.
Online gaming sales amounted to SEK 557m (£46m) an increase of 25%. InnoGames’ Forge of Empires and Elvenar games continued to perform, while the company’s next title Warlord of Aternum launches in Q2. Kongregate has continued to expand its games developer and publishing businesses. While Splay Networks and Zoomin.TV saw 19% growths.
MTG studios reported a 2% drop in sales but attributed that to lower events sales and the timing of production schedules for scripted drama. MTG did see a rise in sales of non-scripted series reporting an operating loss of SEK -15m (-£1.2m)
Esports Insider says: The results are very impressive, especially when you consider DreamHack Masters Marseille is not included in the report due to the date being moved. The split of the two companies also means investors looking to move into esports won’t have to invest in MTG’s “Old media” companies such as TV. The news of the split seems timely with TDC Group withdrawing their plans to invest in the company’s TV business.