Coderes financial performance in the third quarter experienced a significant downturn, with income plummeting by nearly 60% to €143 million. This decline was primarily attributed to the ongoing closures in numerous Latin American markets, which eclipsed signs of progress in Europe.
Europe emerged as Codere’s primary revenue stream as casinos and other entertainment establishments resumed operations across the continent. Italy, their largest market, witnessed a 21% decrease in income to €65.3 million, while Spain’s revenue declined by 17% to €38.2 million.
Codere’s leadership team recently emphasized that Spain remains a crucial market for them, despite the implementation of new advertising restrictions.
Codere generated only €20.9 million from Latin America, representing a reduction of almost 90%. This was due to the absence of revenue from Argentina (their primary income source in 2019 and the first half of 2020) and Panama.
The lack of activity in these markets resulted in Uruguay becoming Codere’s largest non-European income source, reaching €12.1 million, although this still reflected a 33.5% decrease compared to the previous year.
Mexico contributed another €8.4 million, down nearly 90%, while Colombia generated only €0.3 million, a decrease of over 94%.
Codere stated that while closures impacted all their markets, their online operations have demonstrated strength since venues were permitted to reopen.
The gaming industry in Coderes experienced a robust revival following its reopening, with earnings achieving 70% to 90% of pre-pandemic levels within a short period. Uruguay, Italy, and Spain are exhibiting positive performance, with Mexico, Colombia, and Panama anticipated to follow suit shortly.
Virtual commerce was the sole sector to witness an increase compared to the previous year, with revenue surging by nearly 20%.
Codere’s expenditures experienced a substantial reduction, marked by a significant decline in operational expenses, levies, and personnel costs.
Despite this notable rebound, Codere still incurred financial losses, primarily attributed to non-recurring expenses and depreciation charges.
After accounting for inflation, currency fluctuations, and interest expenses, Codere’s pre-tax deficit was considerably larger than the previous year.
In summary, Codere’s financial losses more than doubled compared to 2019.
At the start of this year, Codere tackled its expanding debt issue with a €250 million refinancing agreement that has an initial interest rate of 12.75%, with the potential to decrease to 10.75%.
The organization stated it remains optimistic about its capacity to fulfill its financial commitments despite renewed closures in Europe during the final quarter.
“In recent weeks, our operations in Europe have been influenced by temporary restrictions imposed due to the second wave of the pandemic, affecting our recovery trend,” the company stated. “However, the company remains confident that following the restructuring, the company has sufficient resources and an adequate financial structure to meet its short-term responsibilities until business returns to normalcy.”
In the first six months of 2020, Codere’s income dropped 54.7% to €317.6 million, with net losses expanding to €177.6 million, after second-quarter revenue came in at just €39.1 million as closures in Spain and Italy had a greater impact on revenue.
Last month, Codere made significant progress in obtaining an online gambling permit in Buenos Aires, Argentina. The company’s online gambling proposal was the first to be approved by the Buenos Aires City Lottery (LOTBA), the lottery operator and de facto regulator, meaning the company can now implement the strategies outlined in the proposal.
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