Viaplay shares plunge 60% as outlook worsens, CEO steps down (updated)

Modern Times MTG AB

05/06/2023 02:53

(Releads with share price in first paragraph, detail)
    By Anirudh Saligrama
       June 5 (Reuters) - Shares of Swedish streaming company
Viaplay Group  VPLAYb.ST  fell by 60% on Monday after the
company warned of a weakening business environment as rising
living costs dent demand, and announced it was replacing its
chief executive.
    The group, which competes with Netflix Inc  NFLX.O  and Walt
Disney Co's  DIS.N  Disney+ lowered its short-term organic sales
growth projections for 2023 to 16%-17.5% from its previous
forecast of 24%-26%. 
    Viaplay also said cost cuts were taking longer than planned.
    Jorgen Madsen Lindemann, a former CEO of MTG, Viaplay's
previous parent company, will take the helm with immediate
effect, replacing Anders Jensen, Viaplay said in a statement.
    Jensen said in the statement that "in the light of current
challenges, the company is best served if I step down, and I
have therefore decided to do so."
    It also said it was withdrawing its longer-term financial
guidance and expects to provide an update on its medium-term
outlook when it releases second-quarter results on July 20.
    Viaplay said the rising cost of living had led to lower
demand in Nordic and international streaming, lower wholesale
subscription sales, and a sharp and rapid deterioration in
Scandinavian TV and radio advertising markets. It added that
foreign exchange headwinds have increased.
    Among Viaplay's subscription offers are football rights such
as the English Premier League and car racing, including Formula
1.
    It expects second-quarter sales of between 4.5 billion
Swedish crowns and 4.6 billion Swedish crowns ($415 million to
$425 million). It also expects to have 7.7 million subscribers
at the end of the second quarter which compares with 7.6 million
for the first quarter.
    Viaplay's shares fell 60% by 0721 GMT to 90.50 Swedish
crowns.
   ($1 = 10.8160 Swedish crowns)

 (Reporting by Kanjyik Ghosh and Anirudh Saligrama in Bengaluru;
additional reporting by Terje Solsvik in Oslo; Editing by Edwina
Gibbs and Sharon Singleton)
 ((Kanjyik.Ghosh@thomsonreuters.com;))