Codere Reports Significant Revenue Decline in Third Quarter

Coderes financial performance in the third quarter experienced a significant decline, with revenue plummeting by nearly 60% to €143 million. This downturn was primarily attributed to the ongoing closures in Latin America, which overshadowed signs of improvement in Europe.

Europe emerged as Codere’s primary revenue generator as casinos resumed operations across the continent. Italy, their largest market, witnessed a 21% drop in revenue to €65.3 million, while Spain recorded a 17% decrease to €38.2 million.

Codere’s leadership emphasized that Spain will remain a strategic market for them, despite new advertising regulations.

Latin America contributed a meager €20.9 million, representing a substantial 89.5% reduction. Argentina, their leading market in 2019 and the first half of 2020, and Panama failed to generate any revenue.

Uruguay emerged as Codere’s largest non-European revenue source, bringing in €12.1 million, although this still reflected a 33.5% decline compared to the previous year.

Mexico generated €8.4 million, down 88.9%, while Colombia only contributed €0.3 million, a 94% decrease.

Codere stated that while closures impacted all their markets, their operational performance has been robust since casinos were permitted to reopen.

Coderes business has been flourishing since resuming operations, with income reaching 70-90% of 2019 levels within a short period. Their ventures in Uruguay, Italy, and Spain are already profitable, and Mexico, Colombia, and Panama are anticipated to follow suit shortly.

Digital gambling is the sole area where Codere witnessed a rise in income, with a 19.7% surge.

Overall, Codere’s expenditures have significantly decreased, with a 47.5% reduction in operational expenses. They also incurred lower tax obligations and personnel costs.

However, they encountered some additional costs, such as non-recurring expenses, resulting in a loss of €7.6 million in earnings before interest, taxes, depreciation, and amortization (EBITDA).

After factoring in depreciation, amortization, and asset disposal expenses, Codere’s operating loss reached €49.7 million.

After adjusting for inflation, currency fluctuations, and interest expenses, Codere’s pre-tax loss amounted to €70.1 million.

Finally, after considering tax benefits, Codere incurred a loss of €62.1 million.

In the early part of this year, Codere tackled its mounting debt issue with a €250 million refinancing agreement that carries an initial interest rate of 12.75%, with the potential to decrease to 10.75%.

The company expressed its continued belief in its capacity to fulfill its financial responsibilities despite the reintroduction of lockdowns across Europe in the final quarter.

“In recent weeks, our European operations have been affected by temporary restrictions due to the second wave of the pandemic, which has impacted our recovery trajectory,” the company stated. “Despite this, the company remains assured that, following the restructuring, it possesses adequate resources and a suitable capital structure to meet its short-term liabilities until the business returns to complete normalcy.”

Codere’s revenue in the initial six months of 2020 experienced a decline of 54.7% to €317.6 million, with a net loss expanding to €177.6 million. Revenue in the second quarter reached only €39.1 million as lockdowns in Spain and Italy exerted a greater influence on revenue.

Last month, Codere achieved significant progress in securing an online gambling permit in Buenos Aires, Argentina. Its initial proposal to launch online gambling in the city was the first to receive approval from the Lottery Operator and de facto regulator, the Buenos Aires City Lottery Board (LOTBA), signifying its ability to now execute the strategy outlined in the proposal.

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