Codere Takeover by Shareholders Still Looking for Solid Ground

Posted on: April 4, 2022, 07:18h. 

Last updated on: April 4, 2022, 11:19h.

Gaming operator Codere released its latest financial health report last week. While there is still room for improvement, the last quarter of 2021 delivered a significant upswing in revenue.

Codere Betting Shop
A Codere Betting Shop in Spain is open for customers. The gaming company continues to struggle as a new executive team, and shareholders rebuild its operations. (Image: El Diario)

Spanish gaming operator Codere continues to undergo a transformation it began last year. Shareholders took control of the company and are working to put it on the right path after years of struggles. While losses continued in 2021, the last quarter of the year began to deliver better revenue. However, it also delivered bigger bills.

Codere posted a net loss of €338.6 million (US$371.88 million) in 2021. This represents an increase of 43.1% compared to the red numbers seen a year earlier, according to the company’s annual results report.

The losses occurred despite having invoiced €790.7 million (US$868.42 million) during the year, 33% more than in 2020. However, in the fourth quarter, turnover rose to €291 million (US$319.63 million), more than double that of the same period in 2020. That is also 85% of what it generated in the same period of 2019 before the COVID-19 pandemic.

Trying to Right the Ship

The group’s revenue in Spain amounted to €145.5 million (US$159.84 million) during the year, 25% more than the previous year. On the other hand, Mexico (+63.5%), Argentina (+108.2%), Panama, and Colombia (+7.2%) also registered positive steps forward during the year. In contrast, Italy (-1.3%) and Uruguay (-19.5%) decreased their turnover figures.

For its part, the company’s online business had a turnover of €80 million (US$87.88 million) in 2021. This is 12.1% more than the previous year.

Regarding the fourth quarter of the year, losses amounted to €95.2 million (US$104.57 million). That was a considerable slide compared to the profit of €3.2 million (US$3.51 million) in the same period of 2020.

In terms of installed equipment, as of December 31, 2021, Codere had 42,642 gaming terminals, 4,216 bingo stands, 8,342 bars, 7,980 sports betting machines, 656 gaming tables, 1,128 arcades, 190 sports betting points, 140 gaming halls, and four racetracks.

The company has stressed that it currently keeps its operation open in all its markets. Additionally, it has indicated that it expects to recover its income level before the pandemic in the fourth quarter of this year. This is despite the impact caused by the COVID-19 omicron variant at the beginning of the year.

New Leadership Tapped

Codere, which had already established a new board of directors, reported new additions to the management team. Antonio Zafra Jiménez and Fernando Pombo will play key roles in the company’s future.

The group has tapped Zafra Jiménez as corporate director of the Legal and Compliance Area. He has held similar roles at Bankia (now CaixaBank) and airline company Iberia. In addition, he held the position of Chief of Staff of the Undersecretariat of the Ministry of Economy and was also Secretary of the Council and Director of Legal Advice of the ICO.

Codere has also appointed Pombo as corporate director of Strategy and Corporate Development of the company. He holds a degree in Business Administration, a master’s degree in Finance, and specialized training in mergers and acquisitions from Wharton.

Pombo has primarily focused on consulting, serving stints with Arthur Andersen and Ernst & Young. He also has experience in strategic planning, management control, and finance, including seven years at Codere. He has served at the corporate level in Spain and Latin America.