NENT Announces SEK 700 Mln Q4 Charge For Job Cuts And FTA Write-Downs As It Focuses øn Streaming

Nordic Entertainment Group (NENT) said it has cut jobs in order to save some SEK 250 million a year, as it aims to offset currency headwinds and support the expansion of its Viaplay streaming service. It has announced a one-off charge of approximately SEK 700 million for the fourth quarter in redundancy costs and writedown of free-to-air television content and other assets. There is no change to NENT’s profitable growth commitment for 2020.

It said the shift to the new operating model announced in September has led to a reduction in its overall workforce. The company told newspaper Dagens Industri that more than 200 of its 2,000 or so workers had left over the course of autumn. Di.se said no single division had been harder hit than any others.

NENT said most of the staff savings are expected to take effect in 2020. This will enable NENT to offset US dollar headwinds. There is no change in the group’s profitable growth commitment for 2020.

The group said it has done a review of its content-related agreements and investments and decided to write down the value of some free-to-air TV content and other assets. This largely reflects the change in the type of output that it shows, and the fact that historic FTA deals with long-term series commitments have limited remaining value.

NENT will report the one-off charge of approximately SEK 700 million as an Item Affecting Comparability for Q4. The cashflow impact of the charge is expected to be approximately SEK 250 million. Its fourth quarter results will also include about SEK 15 million of advisory costs reported under Central Operations related to the proposed combination of the Viasat Consumer business with Telenor’s Canal Digital.

Group president and CEO Anders Jensen said it is “very hard when colleagues have to leave”, but this is a “necessary step” for “smarter” work and investment. He said the success of Viaplay is fundamental in its decision to write off some content that it  considers to be of low or no value as it develops within streaming. – Telecom Paper