Catena Media’s recent fiscal statement reveals a challenging situation, with income from its core businesses contracting by 16% year-over-year. This perpetuates a pattern of diminishing returns that commenced in 2021.
Examining the figures closely, the organization generated €16.9 million (approximately $18.4 million) in the second quarter of 2023. This represents a considerable decrease from the €20.1 million earned during the corresponding period in 2022. The downturn was observed across all geographic segments, with the US market particularly impacted, witnessing a 16% reduction to €12.5 million.
Earnings experienced a sharp decline as well. Adjusted EBITDA, a metric of profitability, plunged by 70% to a mere €2.8 million. This signifies a four-year nadir for the firm and raises substantial apprehensions regarding its prospects.
Further amplifying the somber outlook, Catena’s overall revenue, encompassing discontinued ventures, also contracted by a substantial 37%. Although the company’s present market capitalization stands at SEK 1.28 billion, it is burdened by a net debt of €2.13 million.
These statistics underscore the obstacles Catena Media confronts within a swiftly transforming industry landscape.
Catenas latest fiscal report reflects the patterns observed in its divested business segments. While the second quarter of 2022 showed an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of €9.1 million, a substantial decline from the prior year, the firm has identified an upward trend in the second quarter of 2023. Concentrating exclusively on ongoing operations, Catena reached an adjusted EBITDA of €2.6 million. Though this constitutes a 60% reduction from the €6.5 million recorded in the second quarter of 2022, it signals a movement toward a more streamlined and lucrative operational framework.
Nevertheless, the corporation encountered a more significant loss attributed to stakeholders of the parent company from continuing operations in the second quarter of 2023, amounting to €2 million in contrast to a gain of €432,000 during the corresponding period last year. This disparity underscores the inherent instability of the industry, particularly as Catena manages its strategic shift.
Chief Executive Officer Michael Daly, remarking on the second-quarter results, conveyed, “The past quarter marked a phase of sustained advancement for Catena Media as we persist in our metamorphosis into a cash flow positive enterprise centered on the regulated North American market.” This declaration emphasizes Catena’s dedication to its strategic repositioning, giving precedence to enduring expansion and profitability within the burgeoning North American market.
Moving forward, my primary focus is ensuring we remain at the forefront and achieve our fiscal objectives. Our goal is to reach positive net cash flow by year-end, and by 2025, we project North American earnings to reach $125 million per annum with a healthy adjusted EBITDA margin surpassing 50%.
Dally outlined his roadmap for Cadence’s trajectory at the GI Huddle Conference earlier this past June. Speaking of which, Cadence recently published their financial performance for the initial six months of 2023. Total income amounted to €50.6 million, a slight decrease from the €55.9 million generated during the corresponding period last year.
Adjusted EBITDA also experienced a decline to €22.7 million in the first half of 2023, compared to €28.4 million in the first half of 2022. Net income for the first six months of 2023, belonging to parent company owners from ongoing operations, reached €10 million, a reduction from €16.8 million during the same timeframe in 2022.
At the close of June 2023, Cadence held a total liability of €61 million, with cash on hand and short-term investments totaling €38 million, leading to a net debt of €23.1 million.
The company’s shares reached their highest point for the year on February 16th, climbing to SEK 37.54. Currently, their market valuation sits at SEK 1.28 billion.