Increased operating costs ate into revenue growth to leave the operator down on profit in H1.
Malta.- Raketech Group has revealed it has begun to decrease its dependency on Sweden as tighter regulations make the market “challenging to navigate”.
The online affiliate and content marketing provider’s results for H1 show it reduced its focus on the Nordics from 96.8 per cent at the same point last year to 81 per cent.
It saw revenue for the six months to June 30 climb 12 per cent year-on-year to €13.6million. However, an increase in operating costs meant profit before tax dropped 25.9 per cent to €1.3million.
Chief Executive Oskar Mühlbach said: “The unpredictability mentioned in the previous report is still very much present even though dependency on this market is lower.
“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 mid-term.
“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.”
The increase in revenue in the first half of the year came through the Casumba online casino brand, which Raketech acquired last September, and the iGaming affiliate network Lead Republik, which it acquired in March.
Revenue share agreements represented 46.4 per cent of total revenue in the first half, followed by upfront payments (39.9 per cent) and fixed fees (13.7 per cent).
Casino generated a greater proportion of that compared to last year, up from 69.9 per cent to 83.8 per cent. Sports betting accounted for only 12.1 per cent, down from 26.2 per cent owing to the cancellation of sporting events due to Covid-19.
Operating expenses increased 45.6 per cent year-on-year to €10.7million. Direct expenses increased by 84.2 per cent due to more paid media use for Lead Republik and Rapidi casino.
Mühlbach said he was pleased with the group’s performance given the impact of the Covid-19 pandemic, and said that the company was aiming to now partially replace traditional office working with remote working following its successful implementation during the pandemic.
He said: “Working remotely during Covid-19 has in contrast to what one might believe, proven to be very efficient for us and we have been able to notice improvements with regards to cooperation, communication as well as performance management.
“In addition to spending less on office related costs and administration the concept allows us to quickly scale up and down according to what is best at every given situation.
“It also allows us to attract unique top talents, sometimes only available from outside of Malta.”
Earlier this year, Raketech appointed former Catena Media executive Oscar Karlsten as Chief Operating Officer.