Codere’s losses increase ten times in the first quarter due to Coronavirus restrictions
- Codere's group-wide losses increase ten times in Q1 to £87 million due to COVID-19.
- The Spanish company records a 21% decline in group operating revenue to £250 million.
- The Alcobendas-headquartered company reports its adjusted EBITDA at £35.93 million.
Codere SA (OTCMKTS: CODEF) released its first-quarter trading statement on Thursday that posted £87 million in group-wide losses. The company is seeking financial support that it deems vital for the survival of its operating units.
Codere’s Q1 loss came in ten times higher than a £7.7 million loss in the same quarter last year. The company attributed the unparalleled increase in its loss to the Coronavirus pandemic that pushed its gambling venues in South America and Europe to temporarily shut down. Currency fluctuations, it added, further weighed on its financial performance in Q1. Learn more about profit and loss statements.
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The company jumped roughly 10% on market open on Thursday but lost all of its gains later in the day. At 91 pence per share, the £107.32 million company is currently about 60% down year to date in the stock market.
Codere records a 21% decline in group operating revenue
The Alcobendas-headquartered company recorded a 21% decline in its group operating revenue to £250 million that came in significantly lower than £318 million in the comparable quarter of last year. The company said that all of its core operating markets printed a double-digit decline in the first quarter.
Codere slashed its operating expenses in Q1 by £37.7 million, but its adjusted EBITDA still came in at £35.93 million in the first quarter that was lower than £69.1 million last year. In terms of liquidity, the company said that it will start June with roughly £74.50 million in cash.
According to the operator, its corporate debt climbed to £877 million in Q1. It also highlighted £742 million in debt-net equivalents. Earlier in May, Codere failed to get an extension on its debt repayment programme.
Shareholders are interested in Chairman Norman Sorensen’s strategy
Shareholders are now interested in Chairman Norman Sorensen’s strategy for sufficient fundraising. They also want to see if Codere resorts to selling company units in a bid to shore up finances in the next quarter.
The Spanish company commented in its trading statement on Thursday:
“Together with these efforts to preserve liquidity, we have also launched a formal process with financial advisors, to raise an incremental £94.3 million senior debt in order to provide the company with sufficient flexibility to bridge to the restart of our operations and to achieve a revenue run rate that allows us to start generating cash with sufficient room to face potential additional uncertainties in the next months.”