Nordic Entertainment Group (NENT) has announced measures to cut non-sports costs by SEK 700 million, hitting its 2020 results, because of Covid-19. It has scrapped its proposal for a SEK 7.0 per share dividend for 2019 and its long-term executive incentive plan, both of which were due to go to vote at the AGM on 19 May. It will suspend the sale of the non-scripted production, branded entertainment and events business operations of NENT Studios.
This follows its announcement that the coronavirus puts at risk NENT’s aim to deliver profitable growth for FY 2020, as sports events have been delayed or cancelled, advertising demand has fallen, and content production orders have been postponed.
NENT said last week that it would reduce Viaplay sports package prices, would not report media rights costs for postponed sports events in its income statement until they occur, and would not make any new payments for postponed sports rights. It expects compensation for cancelled events, too.
NENT said it is now implementing measures to reduce its ongoing costs, excluding sports rights, by approximately SEK 700 million. This will fully affect the group’s reported results in 2020.
The new measures include cuts in programming and production spending, the deferral or cancellation of any non-core or non-essential projects, lower sales and marketing spending, and the cancellation of the executive incentive plans for 2020.
After the recent group reorganisation, there is no intention to reduce permanent staffing levels, but freelance and consultant costs are being cut and new hires are only being made for essential positions. Non-essential travel and entertainment has been cancelled and NENT expects to make greater use of its remote access.
NENT said it has a stable financial position with SEK 3.3 billion of undrawn credit facilities, and cash of SEK 1.2 billion. The group ended 2019 with total net debt of SEK 4.14 billion, including net lease liabilities of SEK 598 million. This was equivalent to 2.2 times last twelve-month EBITDA before items affecting comparability. The board will propose to the AGM to buy back up to 10 percent of its issued share capital.
The merger of the Viasat Consumer business and Telenor’s Canal Digital business is proceeding as planned and the EU approval filing will be submitted in the coming days. NENT will temporarily pause the sale of its non-scripted production, branded entertainment and events businesses in NENT Studios. NENT Group will launch the Viaplay streaming service in Iceland this spring as planned.
Following the reduction in price for Viaplay direct-to-consumer packages including Sports a week ago, the total Viaplay subscriber base has continued to expand, with limited churn.
NENT has no instances of COVID-19 among its staff and has implemented security and safety initiatives to protect and communicate with its workforce.
