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Catena Media reports €12.7m loss in 2021
Catena Media lost €12.7 million in its fiscal year 2021 despite having a 28.4 percent rise in income from last year, owing to greater expenditures, including impairment costs for its German and French assets.
The overall income for the year 2021 increased by $106.0 million over the previous year, totaling €136.1 million. So, to fully visualize this, let’s break it down.
Although paid revenue was down 16.5 percent from last year to $7.1 million, search sales rose by 34.5 percent to €129.0 million of total income. Following the Hammerstone company sales in the final quarter of 2020, subscription revenue was quite negative (coming to zero), despite being €1.6 million in 2020.
Earnings from cost-per-acquisition affiliation contributed to 54% of total revenue, while revenue-sharing agreements stood by 37% and fixed-fee models equalling to 9%.
Casino remained the affiliate’s key stream of cash, with €86.2m in sales, a 23.9 percent increase over the previous year. This was owing to its rise in Japan and expansion in North America. However, the affiliate says that constraints in the German and Dutch markets hindered expansion, resulting in a minor decrease in income.
With the Casino, Sports Betting income went up by 51.0 percent year on year to €46.2 million. Catena noted that this was mostly owing to North American expansion – the launch of legal sports wagering Michigan, Virginia and Arizona in particular. The emergence of regulated marketplaces in both New York and Louisiana will spur more expansion.
Having said that, the sale of Hammerstone and the subsequent downturn did have an impact on financial trading income, which plummeted 36.2 percent from last year to €3.7m. Catena estimates that the numbers in the sector will be normalized by the first quarter of 2022.
Michael Daly, CEO at Catena, went on to say:
“We strive to position ourselves to capitalize on the global standard toward betting and casino regulation. The stringent limits put on online gaming in Germany over the last year have been difficult for us and the market overall. However, our objective is to learn from the experience so that we can be adequately prepared in jurisdictions that may legislate in the coming. Our business strategy flourishes in regulated markets, and we support regulation to maintain a fair playing field and openness for everyone.
Overall operational expenditures increased by a staggering 96.6 percent to €132.7 million. Staff costs increased to €32.0m (up by 35.6%) and direct costs to €15.5m (up by 53.5%).
Depreciation and amortization expenditures were €10.7 million (down by 7.8 percent), whereas general operating costs were 25.1 million (up by 10.1%). The affiliate also reported a €49.4 million impairment charge on intangible assets linked to sport assets in the third quarter in Germany and France.
EBITDA jumped by 32.3 percent to €68.8 million. Yet, after deducting €4.6 million in interest payments, €1.7 million in losses on financial liability and equity instruments, and €2.9 million in other finance costs, the pre-tax loss was €5.8 million (€14.8 million in 2020).
Compared to a €12.5 million gain in 2020, Catena spent €1.4 million in income tax. This resulted in an initial net loss of €7.2 million.
The harmful €986,000 outcome of foreign currency conversions and €4.5m in interest payments on hybrid securities the overall net loss amounted to €12.7 million (€11.1 million in 2020).
Now when we come to Q4 the revenue increased by 19.9 percent to €31.9 million. This was broken into €30.5 million for search revenue and €1.4 million for paid revenue. Casino revenue was €19.9 million, sports betting revenue was €11.1 million, and financial trading income was €876,000.
Operating costs were €23.2 million (up by 39.8 percent), with a pre-tax profit of €6.6 million (down by 22.4 percent), including all €1.2 million in interest costs and €1.2 million in other finance costs, which were only indirectly affected by €275,000 in improvements on financial liability and equity instruments.
The quarter’s adjusted EBITDA was €12.8 million (up by 4.1 percent from the same time last year).
Catena spent €812,000 in income tax in the last quarter, resulting in an initial net profit of €5.8 million (a decrease of 24.7 percent from the same time last year). Yet, after deducting a €161,000 negative effect from foreign currency conversions and €1.1m in interest payments on hybrid securities, the affiliate completed the last quarter with a total net loss of €1.2m, which was only barely higher than the €1.3m net loss reported at the same time last year.
Daly went on to finish, saying:
“Investments have been made throughout the company in personnel and technology to facilitate growth and to further strengthen the basic architecture of our brands, ensuring that we are well positioned to achieve successful double-digit development in the short and long term. This investment in our long-term prosperity will remain through 2022.”