Catena Media share price plunges despite “exceedingly strong Q3”

Catena Media’s share price dropped nearly 12% as the affiliate announced a net loss of €36.7m (£30.9m) during its third quarter results. The Stockholm-listed firm pointed to impairment costs on intangible assets in Germany and France of €49.4m based on recent regulation in both countries. This resulted in an increase of operating costs of 349.9%. Despite these costs, the affiliate giant experienced a growth in revenue of 32.9%. Operating revenue was €33.1m (up from €24.9m in Q3 2020) while organic growth was 23% (34% excluding the German sports betting and casino market). Rapid growth in North America saw revenue there increase by 124%, with 51% of total revenue generated from the region. New Jersey and Pennsylvania were highlighted as particularly successful states. Casino led the way in terms of product, representing 60% of all revenue, while sports accounted for 38%. Financial trading dropped 42.9% (down 23% on Q3 2020) due to the sale of Hammerstone. Operating costs were up 114.9% to €109.4m, with finance costs of €7.1m resulting in a pre-tax loss of €12.9m. down from a €4.8m profit in Q3 2020. Adjusted EBITDA increased by 33% and totalled €16m, 41.1% higher compared to the corresponding point in 2020. Speaking at the announcement, CEO Michael Daly insists the company stands on a “strong financial foundation”. “During the quarter, we commenced a share buyback programme to optimise our capital structure by returning capital to shareholders. The acquisition of i15 Media assets underlined our ongoing readiness to use our financial strength when attractive business opportunities arise. That said, I foresee our growth in the coming months as being largely organic as we accelerate the exciting journey of internationalising our products and becoming a truly global force in our industry.”