Viaplay Q4 Results Show Signs Of Green Shoots But Write-Downs And “Provisions” Serve As Reminder Of Brutal 2023

Viaplay Q4 Results Show Signs Of Green Shoots But Write-Downs And “Provisions” Serve As Reminder Of Brutal 2023

Viaplay has posted organic group sales for Q4 up 3.4% and saw comparable losses shorten, as the Scandi streamer continues to reshape its business after a brutal 2023.

Sales stood at SEK4.3B ($419M) in Q4 of 2023, compared with SEK4.67B a year prior, and the operating loss (before associated company income and items affecting comparability) was SEK230M, better than last year’s SEK284M.

However, when the various sports content write-downs and other “provisions” related to the company’s strategy shift last year were factored in, the operating the loss was SEK2.86B, its interim report for Q4 revealed.

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After expanding internationally into territories such as the UK and U.S., Viaplay was hit badly by global economics and the fight for subscribers.

In response, CEO Anders Jensen was replaced by former chief Jorgen Madsen Lindemann, who became President and CEO, and a major round of redundancies and a pull back from heavy investment in original drama followed.

In January, Madsen Lindemann unveiled a major recapitalization plan and outlined ambitions for double-digit profit margins in five years. Viaplay has since sold most of its original dramas and production assets, while also cutting costly sports rights agreements. Canal+ and investment fund PFF also swooped to buy 29% of the business each and the recap plan was completed on February 9.

Madsen Lindemann today said Viaplay was “beginning the journey now with commercially focused goals, clear operational accountability, and the ability to put the right teams in place now that we have secured the refinancing.”

Elsewhere in a statement to shareholders, he said: “Our Q4 results were in line with the trading update that we provided in January, and we have reiterated our guidance for 2024,” said Madsen Lindemann. “The recently completed recapitalisation is part of the retransformation of Viaplay Group, which is work in progress and will take time.

“The recapitalisation was a complex process, involving concessions and commitments by many stakeholders, to whom we are grateful for their support. Now, we can fully focus on the many operational improvements that need to be made to the business.”

Among other cost-saving measures, Viaplay has sold its UK business and is withdrawing from the U.S. and the Baltic region. An exit from Poland will follow next year.

“We have written off and provided for our content costs in these markets, which make up the majority of the IAC this quarter, but we are left with the cash costs for the content that we cannot sell back or sublicence,” said Madsen Lindemann.

He noted that increased Nordic operating profits were offset by the losses in international markets, “which has been the pattern for the whole year and is why we are exiting all but one of these markets.”

For the full year, net sales were SEK18.57B, up on 2022’s SEK15.69B, but operating income swung from a SEK413M profit in 2022 to a SEK10.28B loss. Earnings per share nose dived, and they sit at just SEK0.88 each at press time today.