Operator News
Argentina – Argentina’s economic crisis impacts profits for Codere
By Phil - 10 September 2018
Argentina’s worsening economic crisis has taken its toll on Codere’s operating profits according to the financial results for the quarter and six month period ended June 30, 2018.
The results, which were published last Thursday, (September 6), reflected an increasingly grim picture in Argentina where the peso fell to a record low at the end of last month. This was after President Mauricio Macri said that he has asked the International Monetary Fund to speed up delivery of a $50 billion bailout package. The value of Argentina’s peso continued to fall on August 30th, plunging by more than 13 per cent after a 7 per cent drop a day earlier. The decline came despite the central bank’s effort to stabilise the currency by raising a key interest rate to 60 per cent.
According to Codere in H2 2018 Operating Revenue decreased by 6.8 per cent to €759.3m compared to H1 2017, driven by a significant decline in its Argentine revenues “due to the acute devaluation of the Argentine peso versus the euro.” However, Argentina’s currency woes were “partially offset by revenue increases in Spain and Italy. In constant currency terms, Group Revenues for the period would have grown by 11.4 per cent versus H1 2017,” the company said.
Overall operating revenue decreased by €55.2m or 6.8 per cent to €759.3m in H1 2018, due to the decrease in revenues in Argentina (€67.5m) and Mexico (€6.9m) partially offset by Spain (€17.8m) and Italy (€6.4m).
The company reported that H1 2018 Adjusted EBITDA reached €132.9m, 1.1 per cent above H1 2017. Codere classified this slight increase as “remarkable in a context of higher gaming taxes with respect to last year (Italy and Argentina) and the unfavourable FX trends, especially as the Euro appreciated 53.0 per cent versus the Argentine peso, but also versus other Latin American currencies and the US Dollar.”
Adjusted EBITDA increased €1.4m to €132.9m, driven by increases in Mexico, Spain, Panama, Brazil and Uruguay, partially offset by decreases in Argentina, Italy and Colombia. In H1 2018, the Adjusted EBITDA margin was 17.5 per cent, 1.4 percentage points above that of H1 2017, driven by margin expansions in Argentina, Mexico, Panama and Uruguay.
Codere is a leading international private gaming operator headquartered in Spain. As of March 31, 2018, the Company managed over 56,000 gaming machines, 30,000 bingo seats and 6,200 sports betting terminals in Latin America, Spain and Italy, across various gaming venues, including 148 gaming halls, 981 arcades, close to 10,000 bars, 443 sports betting shops and 4 horse racetracks. In the twelve months ended March 31, 2018, 67 per cent of the company’s revenue was generated in Latin America and 33 per cent in Europe.
