Codere has announced the results for the first quarter of 2010 (1T10). They show a moderate growth in almost all areas of activity in comparison with the last quarter 2009 results.

Highlights

• Q1 2010 EBITDA was €54.4 million, exceeding its guidance range of €48-50 million for EBITDA.

• Codere expects Q2 2010 EBITDA to be in the range of €51-€53 million and reaffirm its expectation that 2010 EBITDA will be in the range of €230-240 million.

• Q1 2010 EBITDA reflects growth in local currency in Argentina, Spain and Italy and a reduction of overhead expenses; partially offset by weakness in Mexico, resulting primarily from anti-tobacco legislation, and the depreciation of the Argentine peso against the euro, 13.4% compared to Q1 2009. At a constant exchange rate, Q1 2010 EBITDA would have been €61.7 million, representing an increase of 14.3% over the comparable period in 2009.

• Growth in the machine portfolio was concentrated in Argentina and Mexico where the number of machines increased by 5.5% and 3.6%, to 4,726 and 21,341, respectively compared to Q1 2009.

• Free cash flow (EBITDA less reported net interest, corporate income taxes and capex) was €9.1 million in Q1 2010, an increase of 46.8% compared to €6.2 million in Q1 2009.

• At March 31, 2010 Codere had €107.1 million in cash and €58.0 million undrawn under the RCF. Coverage and leverage ratios were 3.4x and 2.9x, similar levels to Q4 2009.

• Capex in Q1 2010 was €16.4 million, compared to €44.0 million in Q4 2009 and €17.1 million in Q1 2009. 40.9% was maintenance.

• Net income, which includes a €12.1 million gain associated with the 100% consolidation of the Sports Betting business, was €16.4 million in Q1 2010, compared to €1.7 million in Q1 2009. Excluding this non-recurring gain, net income would have been €4.3 million.

Other highlights

Argentine coinless systems update. At March 31, 2010 Codere had completed the installation of TITO or other coinless systems in the majority of the machines in nine halls (Lomas del Mirador, San Martín, Lanús, Morón, San Justo, San Miguel, Lomas de Zamora, Ramos Mejía and La Plata) representing 75% of the total machines seats in the Province of Buenos Aires, an increase from 49% in Q1 2009.

Purchase of 100% of Sports Betting venture. Following a strategic review by William Hill PLC and Codere S.A. of Victoria Apuestas, the joint venture in Spain, the parties agreed on May 13, 2009 to the gradual withdrawal of William Hill from the joint venture as William Hill decided to focus its international sports betting strategy on the internet via William Hill Online. Pursuant to the terms of the agreement, on January 20, 2010 Codere completed the purchase of William Hill’s 50% stake in the company for one euro. Victoria Apuestas, which is the only company authorized to operate in the two regions where sports betting is currently regulated, opened its first outlet in Madrid in April 2008, and at March 31, 2010 traded across 210 locations within the Madrid and Basque regions. As a result of the purchase, as required under IFRS Codere valued 100% of the assets of the Sports Betting business at fair value, which resulted in €12.1 million recorded as Gains or losses on asset disposals or acquisitions in Q1 2010 and it provisionally recorded €8.1 million in goodwill on consolidation. The amount recorded as goodwill is provisional because accounting standards allow for one year following an acquisition to assign goodwill to assets.

Caliente transaction. On February 22, 2010 Codere signed a Memorandum of Understanding (“MOU”) with Grupo Caliente (“Caliente”) relating to the restructuring of present contractual relationship between them. Caliente is the Mexican group to whom Codere has provided gaming management services and hall development funding since 1997. The necessary steps for signing, including due diligence, structuring of the transaction and negotiation of definitive documentation are ongoing and, Codere continues to expect to sign Sale and Purchase agreements for this transaction in Q2 2010. Nevertheless, the transaction is subject to definitive documentation and regulatory approvals, and therefore, the company cannot assure that it will complete the transaction on the terms described at the time of the announcement, or at all.

Acquisition of Panama casinos. On March 17, 2010 Codere entered into agreements relating to the potential acquisition of Thunderbird Resorts Inc.’s (NYSE Euronext Amsterdam: TBIRD) 63.6% stake in six casinos in Panama operated under the Fiesta Casino brand. Codere and Thunderbird Resorts continue to work towards satisfaction of the closing conditions, including approval by a number of applicable government entities (including the Panama Gaming Control Board and local anti-trust authorities) and Codere expects the transaction will close in Q2 2010. Nevertheless, since the transaction is subject to certain conditions to closing, including the aforementioned approvals, there can be no assurance of closing.

Argentine licenses. In January 2010 the Province of Buenos Aires published its Decree 3116/2009, which together with the IPLyC’s Resolutions 144/2009 and 329/2009, ratifies and adapts the application of Resolution 456/06 to those bingo licenses which expire between 2008 and 2011. Among the fourteen halls which Codere currently operates in the Province of Buenos Aires, it has two licenses which expire within this period, Puerto and San Martin, whose licenses originally expired in January and October 2009, respectively. The resolutions provide to current license operators the option to renew the licenses in operation, through June 30, 2021. Operators electing to renew the licenses are required to confirm their intention to adhere to the terms in writing to the IPLyC. Those operators, together with the non profit organizations, will then have to provide documentation demonstrating compliance with the required qualifications. The IPLyC will review applications and issue renewal licenses after receiving completed applications, supporting documentation and required reports from other provincial bodies. The resolution provides that each license for which renewal is solicited will be subject to a fixed up-front renewal fee based on the average monthly canon tax paid under the license in 2007, multiplied by the number of years of the license extension. Renewal licenses will also be subject to a canon tax surcharge accrued and paid monthly over a period of up to five years, for which the precise terms and payment will be established in the individual license renewal resolutions.

Codere believes it is in compliance with applicable requirements for the renewals and anticipate that the individual license renewal resolutions will be issued prior to June 2010. Accordingly, in December 2009 Codere recorded AR$5.4 million and AR$55.4 million (equivalent to €1.0 million and €10.2 million as of December 31, 2009) in intangible assets corresponding to the renewals of the Puerto and San Martin halls, respectively.

The canon tax surcharge corresponding to both licenses will be recorded once the individual renewal resolutions are issued.