Raketech Group has decreased the dependency of its affiliate publishing network on Swedish coverage, stating that the ‘volatility’ of the market due to the re-regulations has made it ‘challenging to navigate’.
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Publishing its 2020 interim results (period ending 30 June), Raketech revealed that its geographical split has reduced its dependency on the Nordic region – with 81% of its operations focused on the region, down from 96.8% in Q2 2019.
Q2 revenues grew by 24.1% during the period, from €5.7 million to €7.02 million. Casino was the key driver for revenue growth, accounting for 89% of total revenues, followed by sports which made up 8% and the remaining 3% made up by ‘other’.
Operating profit for the quarter dropped by 22.8%, down from €1.98 million to €1.53 million. In addition, adjusted EBITDA also fell, down 2.3% from €2.89 million to €2.82 million.
Oskar Mühlbach, Raketech CEO, commented: “As expected, we witnessed a significant drop within our sports related products due to COVID-19 and we experienced decreased traffic to these assets as an effect of cancelled sport events. This is something we expect, and to some extent already are able to witness, will regain traction again once sports return back to normal.
“In addition, we could see that June slowed down even for our casino assets, mainly due to seasonality but also to some extent due to hesitance towards marketing investments from the operators, awaiting the new temporary Swedish regulations coming into force on July 2.”
For the first half of the year trading, Raketech revenues amounted to €13.5 million, up from €12.1 million, a 12% increase on the corresponding period last year.
Adjusted EBITDA for the period fell by 14.5% from €6.38 million in 2019 to €5.45 million. Meanwhile, operating profits also dropped by 39.4% to €2.89 million, down from €4.78 million.
Mühlbach concluded his CEO address by outlining the group’s future outlook: “Despite us significantly increasing our revenues from outside the Nordics to close to 20 per cent, the volatility on the Swedish market due to the re regulations makes it challenging to navigate. The unpredictability mentioned in the previous report is still very much present even though our dependency on this market is lower.
“And depending on the market development on our existing markets, it is worth mentioning that our US organic investments could have a slightly negative effect on our margins in the short to midterm.
“Although volatility might be high, I am excited by the combination of Raketech being both debt free and operationally stronger than ever. This allows us to continue our efforts to deliver on our strategic goals within product development and diversification as well as geographical expansion, organically and through M&A.”