Catena Media Plc has informed that its Q3 trading results will be negatively impacted by the writedown of its German sports betting assets.
The Stockholm-listed publisher issued a preliminary Q3 update, informing investors that it had allocated €42.8 million for the writedown of German sports betting assets acquired between 2016 and 2018.
The decision follows an assessment of the assets ‘expected future earnings in the context of regulatory changes in Germany’, as sportsbooks and affiliate publishers adjust to the new laws of the GlüNeuRStv regime
Expanding its DACH market presence, Catena acquired the German sports networks of Baybets, Dreamworx Online and various independent affiliate websites between 2016 and 2018.
Catena further disclosed that it had reserved €6.6 million for the impairment of a French sports betting asset as it underlined that Q3 writedowns would have no impact on cash flow.
Providing a snapshot of Q3 trading, Catena anticipates period revenues to be registered at €33 million up 33% on corresponding 2020 results of €25 million, as the company tracks a period adjusted EBITDA of €16 million.
Mitigating its European sports betting woes, Catena reported that revenue from North American activities increased by approximately 124% and accounted for 51% of group revenue during the quarter.
Catena Media CEO, Michael Daly, said: “Q3 was an exceptional quarter with September revenue breaking our monthly all-time high. This was the result of our strategic investment in organic development, particularly in North America, and was supported by two recent acquisitions in the United States and the opening of the iGaming market in Arizona.
“The impairment charge adjusts our European business to new market realities following a review by the management team and our focus on transforming the business to reach maximum potential.”