Modern Times Shares Rise After Profit Beats Estimates

Modern Times Group AB (MTGB), Sweden's largest publicly traded media company, advanced 2.1 percent in Stockholm trading after profit rose 40 percent and the company proposed a higher dividend and a share buyback.

Modern Times climbed 8 kronor to 390 kronor. Fourth-quarter net income jumped to 431 million kronor ($67.5 million), the Stockholm-based company said today in a statement. Sales advanced 12 percent to 3.27 billion kronor. Earnings had been seen at 351 million kronor on sales of 3.09 billion kronor, the averages of nine analysts' estimates compiled by Bloomberg.

Fourth-quarter sales at the Scandinavian free-TV division rose 14 percent, while operating earnings jumped 40 percent, helped by shows including ``The Singing Bee,'' Chief Executive Officer Hans-Holger Albrecht said in an interview. The board will propose an ordinary dividend of 5 kronor a share, an extraordinary dividend of 10 kronor a share, and a buyback of up to 10 percent of the shares.

``People have been worried about the free-TV business and now they came in better than expected,'' said Patrick Clase, an analyst at ABG Sundal Collier ASA in Stockholm. He recommends investors buy the stock. ``The higher dividend and the fact that they will continue to buy back shares was also positive.''

Last year, the ordinary dividend was 7.5 kronor and there was no extraordinary dividend.

The company's shares have lost 14 percent this year, while Sweden's benchmark OMX Index has fallen 12 percent.

Future Dividends

``The dividend of 5 kronor should be seen as a base level for coming years,'' Chief Financial Officer Mathias Hermansson said on a conference call, adding that any extraordinary dividend in future years will depend on the board's priorities.

Modern Times, which has expanded in the Czech Republic, Russia and Slovenia, is exploring additional purchases in eastern Europe and Africa. The company is on course to reach its financial targets set in June of revenue of 20 billion kronor in 2011, Albrecht said today.

``We've done a lot of investments that are starting to come through,'' Albrecht said, naming TV6, CDON AB and investments in eastern Europe as examples. People should ``not expect any major acquisitions in the next 12 months on the online side,'' he said.

``It was a very, very good quarter,'' Albrecht said. ``The best results ever. I can't complain.''

To contact the reporter on this story: Maria Fredriksson in Stockholm at mfredriksson@bloomberg.net

To contact the editor responsible for this story: Lars Klemming at lklemming@bloomberg.net

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