Catena Media Q4 revenue stagnant as share price jumps on 2021 start
Performance picks up in January after affiliate was struck by German headwinds and poor legacy casino portfolio
Catena Media posted stagnant year-on-year (YoY) revenue of €26.6m for the fourth quarter of 2020.
The Malta-based affiliate’s casino revenue amounted to €16m, or 60% of total revenue, while the sports segment (€9.3m) accounted for 35% of total revenue.
The remaining 5% was derived from Catena Media’s financial services arm, which posted €1.3m in revenue for the period.
Elsewhere, EBITDA for Q4 rose by 9% to €12.3m from €11.3m in 2019, while New Depositing Customers (NDCs) jumped 10% to 124,959.
Catena Media highlighted several difficulties in Europe for its casino division, citing “continual challenges to maintain website rankings and traffic”, with a particular emphasis on regulatory headwinds in Germany proving a stumbling block.
However, strong growth in both US sports and casino segments, as well as its second-strongest ever quarter in Japan, provided a silver lining away from Europe.
The affiliate noted its US igaming arm had grown 43% YoY with launches in Michigan and Virginia acting as vectors of growth for Q4.
Göran Blomberg, Catena Media acting CEO, said regulatory headwinds would continue to negatively impact operations but there were reasons to be positive moving into 2021.
Blomberg said: “Both sports and casino faced headwinds in Germany in Q4 due to the tolerance period for new regulations and we expect the market to be continuously negatively impacted by this in the first half of 2021.
“Catena Media has a very strong market position and good momentum in most business areas. The transformation programme within our legacy business will increase efficiency and enable future revenue growth. After a very good start to 2021, I have every reason to believe in positive developments for the entire year,” he added.
Blomberg also divulged the affiliate would look to implement a “transformation programme” to consolidate the casino segment after 15% of the business arm showed no growth in Q4.
Blomberg commented: “Part of our legacy business within casino declined during 2020. We have thus decided to put a transformation programme in place to consolidate our casino segment, and by this we expect to increase our organisational efficiency and optimise growth potential.
“The background to this change process is that 15% of the business showed no growth, and therefore must be addressed,” he concluded.
Despite the stagnant revenue increase, Catena’s share price leapt 21% to SEK39.08 this morning as the results were ahead of analyst expectations.
Revenue for January 2021 increased by 58% YoY.