Codere Online

Codere Q1 retail declines outpace Online growth

Codere SA has detailed a challenging start to year-end trading for its land-based gambling properties operating in Spain and South America. However, the heritage Spanish gambling group lauds the continued growth of its standalone Codere Online business.

Q1 accounts for Codere showed declines across all financial metrics, as group revenues slumped by 14% to €313m (Q1 2023: €363m).

Period trading saw Codere’s retail unit generate combined revenues of €260m, down 19% on 2023 comparative results of €323m.

The slump in retail income was primarily due to a 59% revenue drop in Argentina to €34m (Q1 2023: €85m) and Mexican revenues stumbling by 11% to €54m (Q1 2023: €61m).

In Argentina, Codere properties continue to be affected by a “challenging macroeconomic environment”. Likewise, in Mexico, retail performance is affected by ongoing adjustments to venue restrictions, though Codere reported an easing of conditions in the region.

Excluding Argentine and Mexican results, Codere detailed consolidated Q1 revenues of €225 million (+4%), alongside an EBITDA result of €35 million (+20%).

However, group accounts detailed revenue declines across the remaining markets of Spain (-7%), Italy (-3%), and Colombia-&-Panama (-3%).

The revenue decline saw Codere’s balance sheet reveal an 18% drop in net income to €155m, down from €190m reported in Q1 2023.

Meanwhile, cash flow from operating retail activities was reduced to €15.6m, down from €25.6m recorded in Q1 2023.

The firm’s consolidated statement detailed that current liabilities had increased by 6% to €527m, as Codere maintains an outstanding long-term debt of €1.9bn as of March 2024.

Q1 trading saw Codere ‘enter advanced discussions’ with bondholders to secure new terms on its corporate debt and further funds for its recapitalisation. The renegotiation is needed to reduce long-term debt and improve the financial stability of its Spanish and South American businesses.

Codere retail woes contrast with the stand-alone Codere Online business, which reported a record-breaking result during Q1 trading.

Codere Online demonstrated a strong performance in the first quarter of 2024, achieving a record revenue of €53m, which represents a 34.2% increase compared to €39.5m in the same period last year.

This growth was significantly driven by its operations in Mexico and Spain. In Mexico, revenues surged by 51.1% year-over-year, from €17.6m to €26.6m, while in Spain, revenues increased by 21.2% from €18.4m to €22.3m.

The online segment accounted for 16.9% of Codere’s total Q1 revenues, demonstrating its growing importance to the group amid broader declines in other areas. Marketing enhancements and strategic expansions in these key markets contributed to a significant increase in the active customer base, which grew by about 25.2% to 112.5m.

Financially, Codere Online saw considerable improvements with its adjusted EBITDA more than doubling to €8.8m from €4.3m in the previous year.

SBC News Codere Q1 retail declines outpace Online growth
Avi Sher: Codere Online

The Nasdaq-listed operator recorded a net income of €3.4m, a turnaround from a net loss of €1.3m in Q1 2023. Additionally, Codere Online maintained a stable cash position with €38.5m in liquidity.

Moving forward, Codere Online has raised its net gaming revenue forecast for 2024 to between €195m and €210m, up from the previously set range of €185m to €200m.

Entering H2, Codere aims to achieve positive adjusted EBITDA and cash flow for the entire year, reinforcing its upward growth trajectory.

Aviv Sher, CEO of Codere Online, commented on the results, “We are off to a strong start in 2024, with net gaming revenue of €53 million in the first quarter, 34% above that of last year and once again our highest ever quarterly figure.

Our focus on Mexico and Spain continues to yield impressive results, with net gaming revenue in Mexico growing by 51% in the first quarter to nearly €27 million. In Spain, meanwhile, net gaming revenue grew by 21% to over €22 million. In both markets, our targeted marketing efforts allowed us to grow our active customer base by approximately 25% as a result of the acquisition of higher quality customers (i.e., lower churn) but also with an increased spend per active.”

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