The gaming and wagering firm, Codere, faced a challenging commencement to 2021. Their most recent earnings statement shows a sharp decline in income for the initial three months, plunging to €127.2 million (approximately $155 million USD). This signifies a 54.3% reduction contrasted with the corresponding timeframe last year.
The cause? The continuing COVID-19 global health crisis. Stay-at-home orders and operational limitations severely impacted Codere, compelling them to entirely cease their physical locations in Italy throughout the quarter. Other significant regions like Mexico and Panama similarly encountered substantial interruptions and shutdowns.
Although Codere executed expense reduction strategies and enhanced productivity, their modified EBITDA (earnings before interest, taxes, depreciation, and amortization) nevertheless experienced a substantial blow, diminishing by 92.7% to €3.5 million compared to the first quarter of 2020. On a brighter side, Codere emphasized that all regions, excluding Italy, made favorable contributions to EBITDA.
The extensive closures resulted in a net deficit of €91.5 million for the initial quarter. Further exacerbating their difficulties were elevated interest outlays and the devaluation of operational currencies against the US dollar.
As of March 2021, Codere possessed 30,201 operational gaming terminals across all their territories, excluding Italy and Uruguay. They also managed 114 gaming establishments, 975 amusement centers, 182 sports wagering outlets, and 5,864 bars.
In the fourth month of the year, Codere declared it had reached an accord with its primary lenders to reorganize its substantial liabilities. This arrangement aimed to provide the struggling gaming enterprise with a period of respite.
Included in the agreement, Codere also obtained a fresh credit line amounting to €100 million to infuse some critically required funds into the operation. They promptly received the initial €30 million of that sum back in April.
Nevertheless, information regarding the gravity of the circumstances alarmed stakeholders, causing Codere’s stock value to plummet sharply within the same month.
