Catena revenue up 15% in Q4, but writedowns lead to lower profit

| By Dan Kleiner
Catena Media has announced a preliminary 31% rise in North American revenue for Q4 2022, although its operating profit declined because of impairment costs.

The group expects revenue from Q4 to reach €21.5m (£18.9m/$23.3m) from its operations in North America, which accounted for 78% of Catena’s total revenue during the quarter.

The affiliate also expects total revenue from continuing operations to come to €27.4m for the same period, a 15% increase from 2021. The total including discontinued operations is €31.5m.

Adjusted EBITDA is expected to reach €10.8m, a rise of 14% from Q4 2021, while the total for discontinued operations is €12.7m.

The discontinued operations figures include the divested European assets the group decided to sell in its strategic review in 2022, including AskGamblers, which it agreed to sell to GiG this year.

Catena also announced a reduction in its projected operating profit. This is due to non-cash impairment of its goodwill of €7.3m and other intangible assets of €9.9m. Much of this was due to a writedown of one of Catena’s casino assets following a restructuring process.

Further impairment charges relate to its financial trading assets, which are being held for sale.

Michael Daly, Catena CEO, said that he was pleased by the group’s performance in the North American market.

“We gained uplift from the launch of licensed online sports betting in Maryland in November and a strong run-in to the go-live for online sports betting in Ohio on 1 January 2023, which delivered our strongest ever launch period for a US state sportsbook launch.

“We successfully delivered on our strategy of further expansion in North America while completing our strategic review with the sale of AskGamblers and related assets. These preliminary results reaffirm our strategy and provide a solid platform as we enter 2023.”

Catena may be sold

This news comes after it was announced that Catena has appointed Carnegie Investment Bank AB as a financial advisor. The bank will assist the business in assessing strategic options for the potential sale of the remainder of its business.

Under the arrangement, Carnegie will participate in talks with third parties that have shown interest in acquiring certain assets from the affiliate company.

Last month, the affiliate agreed to sell off AskGamblers to Gaming Innovation Group for €45.0m, after iGB in November reported that a deal to offload the flagship brand was close to completion.

This occurred after a strategic review that launched in May of last year, in which Catena explored the possibility of a sale.

This review was later expanded as Catena considered divesting all its European betting and igaming assets in order to focus on North American markets, with the business having confirmed that 25% of all its European staff base had been laid off as part of the process.

Catena recently announced record revenue from the Ohio sports betting launch, which went live on 1 January 2023.

The group also recently announced a policy to repurchase shares on the Nasdaq Stockholm stock exchange to return value to shareholders.

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