Full year results 2020

Codere negotiates with lenders after 57.2% revenue drop in 2020

| By Daniel O'Boyle
International gaming operator Codere has sought financial advisors and opened negotiations with lenders in order to ease “pressure” on its liquidity, after announcing losses of €236.6m in 2020 following a 57.2% revenue drop to €594.6m.
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Of the operator’s €594.6m (£514.0m/$716.8m) in revenue, €154.7m came from Italy, down 54.9%. Spain became Codere’s second-largest source of revnue with €116.4m, down 38.7%, while revenue from Mexico fell 68.2% to €97.8m.

Argentina – previously Codere’s second largest market – saw revenue fall 77.7% to €70.7m while revenue from Uruguay decreased by 29.6% to €52.3m. Panama contributed €22.7m, a 71.0% decline and Colombia €8.7m.

Codere made a further €71.3m from its online operations.

Codere’s operating expenses totalled €572.1m, 46.6% less than in 2019.

These costs included €223.9m in gaming taxes, down 54.8%. Codere’s personnel costs dipped 32.1% to €162.5m, costs of goods sold declined 45.1% to €27.9m other expenses dropped 35.4% to €158.5m.

After €159.6m in depreciation and amortisation, down 11.4%, and €42.6m in non-recurring expenses, 32.5% more than in 2019, Codere made an operating loss of €193.4m, compared to a profit of €94.3m in 2019.

After adjusting for inflation, this loss was €204.0m. Codere then made a net €57.5m financial loss, meaning its pre-tax loss was €261.5m, just under eight times 2019’s loss.

After taxes, Codere’s loss was €236.6, more than 280% more than the loss it made in 2019.

The losses in 2020 led to what Codere described as “pressure on liquidity”. As a result, the operator has called in financial advisors to find alternative methods to enhance liquidity and or boost its capital structure.

The operator said it’s in “constructive conversations” with an ad hoc committee of senior notes holders to work out such alternatives.

“The company expects to reach an agreement in the next weeks which will provide a solid foundation for the recovery of the operations in all of its markets,” Codere said.

The operator had previously faced liquidity questions, but moved to strengthen its position in July 2020, when it agreed a refinancing transaction with noteholders of 55.5% of its existing notes. However, these notes carried an initial interest rate of 12.75% that could then be lowered to 10.75%.

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