Catena Media reins in spending as Q2 profits slump 40%
Stockholm-listed affiliate points to the tough global economic conditions as it looks to scale back expenditure
Catena Media has announced a 4.9% year-on-year (YoY) decrease in Q2 2022 revenue to €28.9m (£24.4m), down from €30.4m generated in the corresponding period last year.
EBITDA at the Malta-based affiliate also fell significantly, slumping 39.7% YoY to €9.1m, while new depositing customers (NDCs) slid 3% to 135,812. The adjusted EBITDA margin was 31%.
Casino led the way in terms of product mix, representing 59% of all revenue, while sports accounted for 38%. Financial trading held the same share of revenue as in the previous quarter and also Q2 2021 at 3%.
In terms of how much each segment brought in for the firm, casino rose 18.5% to €17.2m. Sports betting saw a 31.3% YoY boost – thanks largely to the opening of the regulated market in Ontario – and generated revenue €10.9m for the quarter.
Financial trading took the biggest hit, falling 20.6% YoY to €773,000.
When looking at expenditure, operating costs rose 26.6% to €25.2m, with the new cost-cutting strategy not fully coming into play in Q2. The business also noted €2.5m in finance-related costs, which left pre-tax profit tanking by 82.6% YoY to €1.2m.
Catena paid €771,000 in income tax, while it also noted €682,000 in negative currency translation differences and a further €1.1m worth of interest payable on hybrid capital securities. This led to the group posting a loss of €1.3m for Q2 2022, a far cry from the €4.3m recorded in 2021.
When incorporating these results into how the firm performed in the first half of 2022, revenue was 4.2% up YoY, sitting at €74.1m.
Speaking at the announcement, CEO Michael Daly insisted the future is still bright for the company.
“I nevertheless remain optimistic about the forward outlook. Catena Media is an agile business with global reach in markets where the fundamentals for online sports betting and casino remain strong. The changed economic environment will likely reduce user spending on entertainment in coming quarters, and we are pivoting aggressively to this new reality,” Daly said.
These results come as Catena announced an expansion on its initial review to cover its entire European segment to release capital for a push into the Americas.
This led to the firm warning of potential job losses in its UK and Malta offices amid a focus on higher margin opportunities.
It was also confirmed that the firm has entered into a formal consultation process for the potentially affected staff members.
Catena Media said the review intends to release resources to capitalise on growth markets in the Americas and Asia-Pacific.
Daly told EGR previously: “North America has to be our focus. We’ve made indications at possibly listing there because the investor market is also different and growing.”
Catena Media’s shares, at the time of writing, were down 4.6% to SEK30.41 (£2.42).