MTG says it will ‘continue to deliver on its strategic direction’ despite fall in income

Modern Times Group (MTG) – parent company of ESL/Dreamhack, Innogames, and Kongregate – has published its Q3 financial information, stating its esports sales are up 12 per cent as it “continues to deliver on its strategic direction, reporting seasonally robust operational development for the quarter”. 

Despite having one less master property compared with the same period last year, MTG says the boost is due to an increased in sponsorship sales. It also reports its gaming vertical has seen “stable development […] supported by a strong operational recovery in Kongregate” and reports its VC fund invested SEK 10 million in three growth companies.

Net sales grew 4 per cent to SEK 1,066 million from 1,027 last year, which the Swedish company attributes to “changes in FX rates”. 

Earnings before interest, tax, depreciation and amortisation (EBITDA), however, are down from 44m SEK to -17m SEK year-over-year, and it’s operating income fell from -13m SEK in 2018 to -98m SEK in the current financial period. In the nine months of the current fiscal year, net income sits at -319m SEK.

“The third quarter 2019 showed a high level of activity with important initiatives taken to professionalise the commercial part of esport through agreements and partnerships formed and previously announced. Our esport sales grew by 12 per cent, driven by improved performance in our Master properties and strong revenue development for sponsorship,” said president and CEO, Jørgen Madsen Lindemann.

“The gaming vertical had a solid performance impacted by sequential seasonality in Q3 2019, namely the timing of bigger in-game events, and investments in marketing. However, the underlying operational development was positive with ARPDAU increasing by 7 percent year-on-year in constant currencies.”

Looking ahead, Lindemann says the company is “operating in the very fast paced and dynamic esport and gaming markets” but believes it is “at a position of strength to capture the opportunities in both our verticals as we move into the fourth quarter of 2019”.