The 40% increase in full-year revenue was driven by a strong fourth quarter in which NGR hit a record €50.1m.
The 2023 total beat the operator’s projected revenue range of €140-€150m for 2023. Adjusted earnings before interest, tax, depreciation and amortisation of negative €12m also beat Codere Online’s €20-30m loss projected at the start of the year.
Codere Online’s 2023 optimism comes after it also surpassed expectations in 2022, when NGR reached €122.9m, a 48% increase on the year prior.
Mexico the main event for Codere Online
A particularly key market for Codere Online in 2024 was Mexico, with NGR (revenue minus accounting adjustments) rocketing up by 54% year-on-year for Q4, reaching €25.1m. This made it the company’s largest market with revenue hitting €81.7m for FY2023.
Prior to Mexico’s impressive 2024, Codere Online’s home country of Spain was its top market, with Q4 and FY2022 NGR of €17.8m and €20.8m respectively. It is lagging behind Mexico now despite growth of 26% year-on-year to €75.7m. Codere Online generated NGR of €20.8m in Spain for Q4, a 17% increase.
For Codere Online chief executive Aviv Sher, the growth in Mexico and Spain shows the operator’s strategy paying dividends.
“Our strategic focus on Mexico and Spain, where we are seeing a strong return on marketing investment, has proven successful, with significant increases in both our active customer base and spend per customer,” he explained.
“Casino continued to exceed our expectations with a second consecutive quarter contributing 58% of total net gaming revenue in the period.”
Mexico and Spain growth make up for Colombia stagnation
Colombia isn’t quite showing the same rapid growth as Mexico and Spain, with €2.3m for Q4 flat year-on-year. Despite the Q4 stagnation, Codere Online’s Colombia NGR still rose by 8% for the financial year.
The operator’s other markets including Panama and Buenos Aires in Argentina, reported a 54% NGR increase to €6m. Despite average monthly players for that sector dropping by 14% in Q4, the number still reached €9.2m for the year, a 17% rise.
Net loss was €1m for Q4 2023, down from €17.4m in the same quarter last year.
Full-year net loss narrowed from €45.9m in FY2022 to €3.1m, leaving Codere Online with a total cash position of €41m to end 2023.
LatAm opportunity only just emerging for Codere Online
In 2021, Codere Online became the first LatAm-facing igaming operator to list on a US stock exchange. With an already strong presence in LatAm, Codere Online looks well-placed to capitalise on the region’s huge potential.
Peru and Chile are both nearing regulation, with the former’s low tax rate making it a particularly attractive proposition for operators such as Codere Online.
Codere Online’s LatAm options are developing. However, in a December interview with iGB, Sher revealed that Brazil, which is finally expected to have a regulated betting market in 2024, isn’t currently in Codere Online’s short-term plans.
“Our current structure, our current plans, and the way we operate, we are not entering Brazil,” Sher says. “It’s not a Spanish-speaking country. It’s a different culture, it’s sports-only, and we have huge players advertising for years as they build their brands in the unregulated environment,”
“With the current structure that we have, we will not be able to penetrate Brazil and make good investments and give our investors a good deal there.”
Codere Online bullish about 2024 prospects
The company is setting a target of €185-€200m in NGR for 2024, as well as positive adjusted EBITDA and cash flow.
Sher is excited for Codere Online to keep going on its upwards trajectory in Mexico and Spain, particularly when taking its lower marketing spend compared to previous years in account.
“We were able to grow our active customer base by more than 15% in both markets in the quarter which we believe is impressive considering the similar level of marketing investment in these countries in 2023 versus the prior year,” he continued.
Oscar Iglesias, chief financial officer, added: “In short, we expect to deliver upon our original commitment to investors to be a profitable company in the third year after de-SPAC (special-purpose acquisition company) and are more committed than ever to creating meaningful value for our shareholders.”
Original article: https://igamingbusiness.com/finance/mexico-becomes-codere-online-biggest-market-2023-surge/
