Codere Shares Its Operating Results for Q3 of 2021, Shows Signs of Recovery

Codere, a Spanish gaming company, reports massive revenue growth in Q3 of 2021 and its restructuring deal through which creditors will take control is set to be finalized on November 19. The agreement on debt-for-equity was scheduled to be completed on November 5, but it was pushed back by 14 days.

The Revenue of Codere for Q3 was $233.3 Million

Compared to the same quarter in 2020, the revenue of Codere increased by a whopping 63.1% and reached $233.3 million. In 2020, Codere reported that it operated under losses of over $230 million and recorded a drop in revenue by 57.2%. This came as a result of the closure of many properties in Latin America. However, it was able to bounce back and even increase its influence in this region by announcing a deal with Real Madrid.

The Latin American business contributed to 47.1% of its revenue, or around $127.2 million. This region comprises Mexico, Argentina, Panama, Colombia and Uruguay. That is a 430.6% increase compared to 2020, when the revenue was just short of $24 million.

Panama and Argentina did not conduct any business in the third quarter of 2020, but in Q3 of 2021, managed to double back and had $15.5 million and $45.9 million revenue, respectively. The main contributor to the massive revenue in Argentina was the four-year sponsorship deal with River Plate, an Argentine soccer team.

Mexico’s revenue rose to $48.8 million, which is a 407.1% increase, but Uruguay suffered losses as its revenue was around $12 million, 13.6% lower than the same period last year.

Italy and Spain comprise the European market and they added another $118 million to the revenue, $43.4 million of which were by Spain, while $74.6 million were brought by Italy. The business’ online gaming portion recorded $21.9 million. In June Codere announced that it is planning on listing Codere Online on NASDAQ after a deal worth $350 million was made with DD3 Acquisition Corp., a special purpose acquisition company (SPAC).

Operating Expenses Also Rose

As for the operating expenses, they were 44.8% higher than in 2020 and totaled around $229.7 million. Gaming expenses reached around $100 million, personal costs reached $53.7 million, rental costs came at $7.3 million and other expenses reached $56.2 million. The quarter’s costs of goods sold were $12.3 million.

Before interest, depreciation, taxation and amortization, the adjusted earnings were $37.6 million, a $5.2 million increase from last year. After inflation on operating expenses was taken into account, the operating losses came at $28.8 million, which is lower than the $56.7 million in 2020.

The interest expenses of the company reached $51.9 million, $8 million of which came from exchange rate variations and financial investments. The corporate income tax inflation in Argentina came it $2.7 million.

On the flip side, Codere also made $1.2 million in income from minority investments and interest income. All in all, the losses of the company were reduced by 20.3% as they reached $85.6 million.

Condere is convinced that it is slowly starting the recovery process from the pandemic. Its growth is largely due to the reactivation of the presence of the group in Q3. In July, the company opened in Argentina and then opened in Uruguay after the COVID-19 restrictions in the previous months were loosened.

Even though it faces some restrictions on capacity and working hours, Codere’s operations are running in all markets. Back in September, a consent solicitation offer was launched and more than 90% of the shareholders in Codere approved it a month later. This transaction is likely to be completed on November 19, as told in an official statement by the company, which states that Codere and its bondholders are convinced that the financial restructuring will be implemented on that day.

It also added that it expects to complete the merger between SPAC DD3 Acquisition Corp II and its gaming subsidiary this month and that will lead to the creation of Codere Online, which will be the first NASDAQ-listed online gaming operator in Latin America.