Amidst challenges in Mexico and Argentina, Codere's first quarter revenues fell.

Compared to Codere's Q1 2023 revenue of €363.1m, Codere's Q1 2023 revenue was significantly lower. Adjusted EBITDA for the firm for Q1 also declined, falling 26.6% from €64.4m to €47.3m.

After falling 12.1% from €211.5m in Q1 2023, consolidated net revenues for Q1 2018 were €185.9m.

Codere did point out that the group's cash position had stayed relatively consistent at €104m from €107.5m at the beginning of the quarter, despite the decline in income.

According to Codere, the group's adjusted EBITDA for the first quarter demonstrated the company's ongoing recovery after restrictions in Argentina and Mexico were lifted.

Codere added that it was making headway in discussions with bondholders towards a "comprehensive recapitalisation" when it announced its first quarter earnings. The goal is to improve the financial position by decreasing debt. As for Codere, it plans to provide an update on the status of the procedure soon.

Difficulties in Argentina and Mexico
In 2024, Codere expects to see an improvement in its financial numbers due to two factors: the "challenging macroeconomic environment" in Argentina and the better scenario regarding the abolition of restrictions in both Mexico and Argentina.

Codere highlighted the "substantial progress" made in removing operational constraints. As the first quarter came to a close, Codere had already seen one closure and 14 halls were partially impacted by limitations in Mexico.

The business also made note of the fact that adjustments for hyper-inflation in Argentina were not factored into its adjusted EBITDA statistics. Notably, if Argentina had not been a part of the first quarter, retail sales would have totalled €226.2m, up 7% from Q3 2023.

Codere had a 4% increase in revenue during the first quarter compared to the first quarter of 2023, excluding Argentina and Mexico. A 20% increase in adjusted EBITDA would have been possible if those two markets had been removed.

The continued success of Codere Online
Despite Codere Online's great performance in Q1 following a solid 2023, the company's revenue and adjusted EBITDA both saw reductions.

Revenues for Codere Online reached €53 million in the first quarter, a record high and a 34.2% increase compared to €39.5 million in the same period previous year. This was mainly caused by a 51.1% increase in income from €17.6m to €26.6m in Mexico compared to the previous year. Spain, the country of origin for Codere Online, also saw a 21.2% increase, going from €18.4m to €22.3m.

With retail bringing in €260.8m, down 19.4 percent from €323.6m in the same quarter previous year, Codere's online sales accounted for 16.9 percent of the group's overall revenue in Q1.

The company's marketing budget saw a significant boost in Mexico and Spain, resulting in a 25.2% increase in active customers from 89.8 million to 112.5 million.

Compared to the same quarter a year ago, Codere Online's adjusted EBITDA of €8.8m was more than quadruple. Net income for Codere Online increased to €3.4m in Q1 2023 from €1.3m in Q1 2023. Once again, the company's liquidity was €38.5m, which is a solid situation.

The anticipation of Codere Online is growing
Codere Online is increasing its forecasts for 2024 following a solid first quarter. After previously estimating net gaming income between €185 million and €200 million, it has now raised that range to €195 million to €210 million. Also, for the entire year of 2024, it intends to have positive adjusted EBITDA and cash flow.

Oscar Iglesias, chief financial officer of Codere Online, thinks the firm has a good chance of continuing its development trend.

"The first quarter's top line growth was better than expected, and Mexico is now our largest market by revenue, further separating us from Spain," Iglesias stated.

"But what really gets us going is that Mexico is now bringing in positive adjusted EBITDA as well, which is a first."

Shops struggling
The group's retail division failed to live up to Codere Online's stellar first quarter performance.

Due to Argentina's economic woes, Codere's retail revenue plummeted 59.1 percent, from €84.7 million to €34.6 million. Retail sales in Mexico came to €54 million, down 11.3% from the previous year.

Although the company's revenue fell 2.6% to €78.3m in Q1, Italy remained its biggest retail market. At the same time, with sales reaching €17.4m, up 4.2% from the previous quarter, Uruguay was alone among retail markets that experienced growth.

A decline of 35.8 percent from €60 million in the same quarter previous year, Codere's adjusted EBITDA for its retail business came to €38.5 million.