Codere Online posts growth, struggles with Argentina penetration
Codere Online has reported notable growth in its full-year 2024 results, demonstrating a robust performance in its core market of Mexico, while facing challenges in establishing a foothold in Argentina.
On February 20, Codere Online announced its financial results for the year ended December 31, revealing a total net gaming revenue of €211.6 million (approximately $221.4 million or £175.2 million), marking a year-on-year increase of 23%. The company also achieved an adjusted EBITDA of €6.4 million, up 18.1% from the previous year.
The operator’s monthly active player base has expanded, with a 13% increase over the past year, reaching an average of 144,900 players.
In its primary market, Spain, Codere Online realized a revenue of €87.7 million, reflecting a 16% year-on-year growth, accompanied by a 17% increase in average monthly active players to 49,700.
Competitors in Mexico Experiencing Stagnation
Codere Online’s revenue in Mexico for the full year stood at €106.6 million, an impressive year-on-year growth of 30%. However, Q4 revenue remained flat at €25.1 million, primarily impacted by the significant devaluation of the Mexican peso. CEO Aviv Sher highlighted that, when adjusted for currency fluctuations, the company’s growth during this quarter would have been 14%.
During the earnings call, Sher speculated that some competitors, particularly European operators, had slowed their investment in Mexico, allowing Codere to capture a larger market share. He noted, “Some competitors may have diverted their focus from Mexico, having found initial success in other Latin American markets.”
Looking ahead, Sher indicated that the upcoming FIFA World Cup might prompt competitors to refocus their strategies and re-enter the Mexican market.
Additionally, the company has effectively addressed certain technical challenges related to its marketing investments, further contributing to its growth in Mexico.
Barriers to Expansion in Argentina
While Codere Online has made inroads in the Buenos Aires online gambling market, expansion across Argentina has been constrained by the complex regional licensing framework. Sher explained that the lack of necessary licenses to operate in other provinces has hindered the company’s ability to tap into the majority of the country’s gambling revenue.
“Despite our significant efforts, our operations are currently limited to Buenos Aires, which restricts our growth potential,” he stated. However, Codere remains optimistic that local operators may eventually be willing to sell licenses, facilitating further expansion into other provinces.
Strategic Focus on Core Markets
When discussing future expansion in Latin America, CEO Sher emphasized the need to prioritize investment in existing markets such as Mexico and Spain. “Increasing our marketing budget in these established regions yields a clearer return on investment,” he stated. He also expressed that entering markets like Chile or Peru would not be strategically sound at this moment due to the substantial growth opportunities still available within their core markets.
Furthermore, Codere Online faced a potential delisting from the Nasdaq stock market after failing to file its 20-F report in November. However, following an appeal, the company was granted an extension until February 12 to submit the filing. The continuation of its Nasdaq listing is contingent upon the timely submission of its 2023 annual report by May 12, 2025.
In summary, while Codere Online demonstrates significant growth in specific markets like Mexico and Spain, challenges persist in Argentina due to regulatory constraints. The company’s strategic focus on maximizing opportunities within its established markets positions it favorably for sustainable growth in the competitive online gambling landscape.
