Catena Media revealed a 5.7% year-on-year increase in revenue in the last two months to February 29. The affiliate marketing mammoth says that it expects further growth despite the novel coronavirus (Covid-19) pandemic.
Catena divulged in a trading update that revenue for January and February equal to €18.0 million, with casino revenue making up 59% of the entire figure. Sports and financial services accounted for 35% and 5% respectively.
Income before interest, tax, depreciation and amortization (EBITDA) for the two-month period went up by 16.6% year-on-year to €8.6 million a 47.9% higher margin in comparison to 2019’s 43.4%.
According to Catena, adjusted EBITDA, not including non-recurring costs went up by 19.9% to €8.9 million, with a 49/2% increased margin.
The affiliate business had no major investments during the period and, by the end of February, it had €19.2 million in cash and cash equivalents. It also had a net interest-bearing debt position amounting to €162.5 million.
With regards to its current performance as well as the future of the business, considering the ongoing coronavirus crisis, Catena said it expects to see continuous positive outcome in its casino division. It also does predict any negative effect on revenues during the second quarter.
According to Catena, its casino division has been consistently performing well in March, with traffic higher than normal in January and February 2020, when this part of the business was still its main source of revenue.
But, while the affiliate business did note that the suspension of most sports leagues, as well as the cancellation of major sports events, will highly affect sports revenue, they are working with key operators to promote sports events that are still in operation.
To alleviate the lack of sports revenue, Catena said that it would be focusing on expanding its casino business by converting traffic from several sports-related sites into casino revenue and curbing on low-margin media expenses.
Catena also noted that its financial services segment has observed a positive traffic trend, saying:
“We believe the Covid-19 outbreak will have no foreseeable negative long-term effects on the business and currently postponed events may contribute with a positive effect in the future when they are rescheduled.”
According to Per Hellber, Catena chief executive, “The world is facing an unusual and challenging situation due to Covid-19. Catena Media’s largest business segment, casino, represented 73% of EBITDA during January and February, is performing well and shows a positive development under the current circumstances. Several sports events have been cancelled or postponed, and it is uncertain for how long this will last, but we are holding back on costs and funding alternative revenue streams for the sports segment.”
Hellber added, “Provided that the sports events start up after the summer break, our target remains unchanged, to reach double-digit profitable growth in 2020.”