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Market growth adds to Modern Times sales

Sweden-based group sees 24% increase

AMSTERDAM — Strong growth in the Scandinavian and Baltic TV markets helped push net sales of Swedish-based Nordic channel owner Modern Times Group (MTG) up 24% in the first six months of this year and brought its earnings into the black for the first time since year-end 1995.

Net sales at MTG, which spun off from the giant Kinnevik nearly a year ago, rose from 1.456 billion Swedish kroner ($184 million) to $229 million in the first six months of 1998. Over the same time, MTG posted a profit of $8.6 million, a significant improvement on losses a year earlier of $24.4 million.

“We managed to keep costs under control as well as increase sales,” MTG president and CEO Pelle Tornberg told Daily Variety, pointing out the “bottom line steps we have taken are reflected in the share price. It’s gone up 160% since the beginning of the year.”

MTG stock is trading at $15 per share (Nasdaq and Stockholm Borsinformation).

Outstanding sales growth in Sweden, Norway and Lithuania were credited with boosting sales for TV3 Broadcasting, the free TV arm of MTG, from $93 to $98 million. The nearly 10-year-old TV3 is the oldest commercial TV network in the Nordic territories, and has clearly become MTG’s main vehicle in its rapid expansion into the Baltic States.

Growth in the Estonian TV ad market burgeoned by 95% in the first half of this year, with TV3 Estonia’s share of the ad pie climbing from 34% to 49%. In Lithuania, TV ad revenues surged 64%, with TV3 Lithuania’s share of the ad pie climbing from 21% to 36%.

Modern Times recently bought a 49% stake in Channel 31 in Latvia, which it intends to relaunch in the fall as TV3 Latvia. MTG’s pay TV arm Viasat also plans to launch pay TV services across the Baltics by the fall. Viasat reported a rise in sales in its Nordic operations to $26 million, up from $15 million in the first half-year of 1997.

MTG earlier this year said it would entertain bids for its 325-title film library but no imminent sale is in the offing, Tornberg noted. The library includes U.S. TV rights to “Dirty Dancing,” among other titles. Sale is being handled by Furman Selz.

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