June 9, 2014 / 7:31 AM / in 4 years

Broadcaster MTG says Q2 profit hit by Ukraine costs

STOCKHOLM, June 9 (Reuters) - Swedish broadcaster MTG will take 154 million crowns ($23 million) in one-off costs in its fiscal second quarter, mainly due to an uncertain outlook in Ukraine and the devaluation of the country’s currency, it said on Monday.

MTG will write down 100 percent of the intangible assets from its 85 percent stake in Viastrong Holding, which operates in Ukraine. The operation, included in the Group’s Pay-TV Emerging Markets business, accounted for less than 1 percent of group sales last year.

“The decision has been made due to the uncertain economic outlook in Ukraine and the significant devaluation of the Ukrainian Hryvnia currency”, the company said in a statement.

Apart from 160 million crowns of charges related to Ukraine, MTG said it would take 70 million crowns in other costs, including restructuring costs, offset by a 76 million net gain from the sale of Zitius in Sweden.

MTG said the restructuring would yield annual cost savings of around 40 million crowns, of which parts would be reinvested in new areas, such as business intelligence and data analysis.

CEO Jorgen Madsen Lindemann said the company remained committed to its Ukraine operations, and there was “substantial long-term potential” for the business.

Kinnevik owns 48 percent of votes and 20.3 of the share capital in MTG.

MTG shares were down 0.2 percent at 0713 GMT, while the broader Stockholm share index was up 0.8 percent.

$1 = 6.6296 Swedish Kronas Reporting by Helena Soderpalm; Editing by Mark Potter

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