Mexico drives Codere Online's 63% revenue growth in Q3, softens Spain's new rules

Codere Online has released its financial results for the quarter ended September 30, 2021. Codere’s operating revenue for the first nine months of 2021 has increased by more than 8%, rising to €499.6m ($572.8m).

Compared to the same quarter in 2020, the revenue of Codere increased by 63.1% from 2020 and reached €233.3 million (USD$ 266.67 million).

Codere’s Latin American operations, including Mexico, Argentina, Panama, Colombia, and Uruguay, reported €127.2 million (USD $145.5 million), a 47.1% of its revenue. Up 430% from 2020, when the revenue neared €24 million (USD $27.4 million).

During the third quarter of 2021, Panama and Argentina had €15.5 million (USD $17.7 million and €45.9 million (USD $52.5 million) in revenue, respectively. The main contributor to Argentina’s revenue was the four-year sponsorship deal with River Plate, an Argentine soccer team.

As for Mexico’s revenue, it rose to €48.8 million (USD $55.8 million), a 407.1% increase, however, Uruguay suffered losses as its revenue was around €12 million (USD$ 13.73 million), 13.6% lower than the same period last year.

The European market which is comprised of Italy and Spain contributed €118 million (USD $136 million) to the revenue, with €43.4 million (USD $49.6 million) and €74.6 million (USD $85.3 million) respectively. The business’ online gaming portion recorded €21.9 million (USD $25 million).

As a result of reopening, operating expenses, excluding depreciation and amortization, have also risen during the third quarter amounting to €200.4 million (USD $229.3 million), up almost 45% from the same period last year. The company also noted that, despite being reopened across all markets, it is still operating under restrictions in certain places.

In June 2021, Codere Online entered into a definitive business combination agreement with DD3 Acquisition Corp., a publicly-traded special purpose acquisition company, that upon consummation will result in Codere Online becoming a public company.

Moshe Edree, Managing Director of Codere Online, stated: “Our third-quarter results reflect the strong revenue trends in Mexico, with a 26% year-on-year increase in our total net gaming revenue. This performance was partially offset by a decline in net gaming revenue in Spain due to the changes in regulation that came into effect starting in May, with Q3 2021 being the first full quarter of operations in which the ability to offer player bonuses and other marketing activities has been curtailed. However, we are adapting well to these restrictions and believe that there continues to be an opportunity to grow our market share in Spain, as we have since the onset of these restrictions, which put operators that can leverage a retail footprint at a competitive advantage.”

“In addition to the Rayados (Mexico) and River Plate (Argentina) sponsorships that we announced in July, we have recently announced a further 5-year extension (through the 2025-26 season) of our agreement with Real Madrid. This agreement will now cover over twenty countries throughout Latin America which we believe will boost our expansion in the region in furtherance of our ambitious growth targets,” he added.

Oscar Iglesias, Chief Financial Officer, said: “Despite the anticipated regulatory headwinds in Spain, we continue to be excited about the market and have recently been granted a 10-year extension (through May 31, 2032) of our two general online gaming licenses (sports betting and other games), which were otherwise scheduled to expire on June 1, 2022. More generally, the business continues to perform in line with our expectations and we are on track to meet our net gaming revenue outlook for 2021 of €81 to €86 mm.”

“We have made significant progress on the business combination with DD3, which we expect will be approved in its upcoming shareholder meeting on November 18, 2021. We are looking forward to closing the transaction and having the funding needed to execute our marketing plan and to delivering what we expect to be significant growth in this business over the coming years,” he concluded.