The Spanish gaming firm, Codere, has experienced significant difficulties due to the COVID-19 outbreak, announcing a substantial decline in earnings for the initial quarter of 2021.
Compared to the corresponding timeframe in the previous year, their income plunged by more than half, largely attributed to shutdowns and limitations that mandated the closure of their physical stores, particularly in Italy. Although other regions like Mexico and Panama remained functional, they also encountered substantial interruptions and closures.
Despite enacting expense reduction strategies, Codere’s profits suffered a considerable blow, with a 92.7% reduction in adjusted EBITDA. The one positive aspect is that all regions, excluding Italy, managed to make a favorable contribution to the EBITDA.
As anticipated, the corporation declared a net deficit for the quarter, worsened by elevated interest expenditures and disadvantageous currency fluctuations. Their cash holdings also diminished notably throughout this period.
In spite of the obstacles, Codere persists in managing an extensive network of gaming devices, bingo establishments, casinos, wagering outlets, and sales points across diverse markets, showcasing their tenacity in the face of hardship.
During the month of April, Codere reached an agreement with its primary lenders. This arrangement aimed to reorganize its financial obligations, which had become increasingly challenging to handle.
Included in the agreement was the provision of an additional €100 million in funding. Consider it a crucial boost – they desperately required this infusion of capital, particularly given that €30 million had already been depleted by April.
Nevertheless, this assistance came with a consequence. As creditors assumed control, Codere’s share value plummeted. Investors were far from pleased, to put it mildly.
