Affiliate giant, Catena Media has seen revenue fail to meet internal targets for the second consecutive quarter, with tightening regulations in the UK and France being blamed, as well as the lack of improvement in the newly regulated Swedish market.

Revenue was down 9% year-on-year to €23.7m over the three months to 30 June, a period that Catena said was traditionally weaker for sports betting due to the lack of any major sporting event. Q2 comparatives were especially tough, due to the result of the prior year’s  FIFA Men’s World Cup, it added.

However, the quarterly performance was also hit by tightening regulations in the UK and France. In the UK, the introduction go more stringent Know Your Customer (KYC) rules required all customers to verify their identities. These rules were seen as “time-consuming and complicated, and resulted in many customers failing to complete the verification, leading to deposit delays, delayed revenue, and also a decline in new depositing customers. It was seen that for the quarter, new depositing customers across all brands and markets were down 18% to 223,998.

French regulator L’Autorité de régulation des jeux en ligne (ARJEL) then introduced new controls for premium (paid) tips, which forced Catena to change how customers signed up for the new service and receive the tips, which was another factor which impacted revenue.

Furthermore, it was seen that Catena are yet to see any improvements in Swedish operations since the introduction of the new regulations in the country this year, IN Q1, chief executive, Per Hellberg said, “operators revenue had fallen “dramatically” following the introduction of new regulations.

But, at the same time, he also added that this would prove beneficial to the business in the long-term as licensees relied more on affiliates for customers. This does not appear to have had an effect in Q2.

The business has also suffered from high casino payouts to players in Q2m which is something which Catena have noted as an affect on revenue share deals.

Operating profit dipped from €10.0m to €6.1m and profit before tax from €6.2m to €7.1m. EBITDA for the three months to June 30 was down 22% to €9.4m, while adjusted EBITDA excluding non-recurring costs fell 21% to €9.5m. However Catena benefitted from a €3.0m gain from fair value changes of its assets, which meant that after financial expenses and taxes, net profit for the quarter was up 21% at €6.8m.

Operating revenue for the six months through to June 30, 2019 amounted to €49.8m (£45.5m/$55.3m), which is down slightly from from €49.8m (£45.5m/$55.3m).

Search revenue has remained Catena’s primary source of income, which has generated €41.9m in the first half, down from €42.7m last year. Paid revenue has also seen a slip, down from €7.2m to €6.3m, but subscriptions revenue improved from €100,000 to €1.7m.