Modern Times Group MTG AB (publ.) ('MTG' or 'the Group'), the international entertainment broadcasting group, today announced that it will recognise approximately SEK 3,191 million of one-off costs in its financial results for the fourth quarter and full year 2011. This follows the recent completion of the Group's annual asset impairment tests. The majority of these costs are non-cash and primarily arise from the impairment of goodwill relating to the Group's Bulgarian broadcasting assets. The one-off costs also include the impact of the decision to close down the Group's loss making free-TV operation in Slovenia in the coming months.
The one-off costs will be included in the Group's
financial results for the fourth quarter and full year
2011, and will be reported as a separate line item above
the operating profit (EBIT) line in the Group's
consolidated income statements.
Approximately EUR 330 million (SEK 2,979 million) of the
one-off costs relate to the impairment of the remaining
goodwill and other intangible assets that arose from the
Group's acquisition of 100% of Nova Televizia in Bulgaria
for EUR 620 million in 2008. These costs are non-cash.
MTG previously recognized a EUR 296 million (SEK 3,151
million) impairment of the goodwill arising from the
acquisition of Nova Televizia on 18 December 2009, and
there are therefore now no intangible assets related to
the acquisition of Nova Televizia on the Group's balance
sheet. The remaining SEK 212 million of one-off costs
predominantly relate to the writing down of programming
related assets by the Group's Bulgarian broadcasting
operations, as well as the closing down of the Group's
free-TV operations in Slovenia.
Separately and in addition to the above, the Group has
also aligned the accounting treatment of the results of
its Ukrainian satellite pay-TV business with that applied
to its other pay-TV operations. This will result in a SEK
-29 million accumulated revenue adjustment and a SEK -18
million accumulated operating income (EBIT) adjustment
for the Pay-TV Emerging Markets operations in the Group's
consolidated results reporting matrix for the fourth
quarter of 2011. The alignment relates to reporting
results net of subscriber connection fees.
Hans-Holger Albrecht, President and CEO of MTG,
commented: "These write-downs are mainly non-cash and
primarily reflect the operating environment in Bulgaria,
where the TV advertising market has not yet returned to
growth and the wider Eurozone issues continue to impact.
This has delayed the anticipated development of our
Bulgarian business and we have therefore taken the
conservative approach of fully adjusting the value of
these assets on our balance sheet. This does not affect
our commitment to the market, or our belief in the longer
term potential of our Bulgarian operations."
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