(Alliance News) - Matomy Media Group Ltd on Thursday reported a significantly widened loss and sharp drop in revenue in the first quarter of its financial year.
In the three months to June 30, Matomy's pretax loss widened significantly to USD16.6 million from USD3.4 million a year before.
Matomy's operating expenses multiplied to USD19.2 million from USD5.3 million. The company booked goodwill impairment charges of USD16.0 million for its domain monetisation unit, Team Internet.
A goodwill charge reflects the excess paid for a business over the fair value of the business's assets.
The company explained: "Due to changes in compliance requirements, a handful of the company's publishers have been deactivated, which resulted in negative impact on the company's projected Ebitda. As a result, the company recorded goodwill impairment charges related to its domain monetisation reporting unit."
Matomy's gross profit in the period slipped 18% to USD4.0 million from USD4.9 million the year before.
The company's revenue in the first quarter dropped 37% to USD18.0 million from USD28.6 million the year before.
In April, Matomy agreed to sell its 90% stake in technology firm Team Internet AG to minority shareholder Rainmaker Investments GmbH for USD36 million cash.
However, due diligence for the deal was extended twice - once to the end of July and then again for a further 45 days - due to "difficulties raised in the negotiations for the sale". This includes a claim that Matomy owes Rainmaker "an alleged debt", which Matomy disputes.
Shares in Matomy Media were 3.6% lower in London on Thursday at 2.70 pence each.