Operator News
Spain – Codere reports profits despite Argentina crisis
By Phil - 29 August 2019
Codere has reported an adjusted gross operating profit (EBITDA) of €70.3m in the second quarter of the current year, representing an increase of 8.2 per cent compared to the €65m which it earned in the same quarter in 2018.
According to preliminary data communicated to the National Securities Market Commission (CNMV), the company managed to compensate in the second quarter of the year for the lower contribution of its business in Argentina. Codere results have been impacted by the recent devaluation of the peso as Argentina’s economic crisis deepens.
As a result the company reported an adjusted EBITDA of €17.3m in Argentina in the second quarter, representing a 29 per cent decrease compared to the same period in the previous year. However Codere stressed that the increase in overall adjusted gross operating profit in the second quarter is due to the “solid performance” recorded in Mexico, Spain, Colombia and Uruguay, despite the 29 per cent decline the company experienced in the Argentine market.
Preliminary data indicate that the company closed the second quarter with a turnover of €354.9m, 5.6 per cent less. Codere’s quarterly revenues were affected by the lower contribution of its activity in Argentina, which went from €109.9m in the second quarter of 2018 to €80m in the same period this year (-27.2 per cent).
Despite the impact of its operations in Argentina, Codere stated that its adjusted EBITDA estimates for the current year as a whole stand at €290m, thanks to the better evolution than expected in markets such as Mexico and Uruguay, amongst others. The company’s new annual forecast envisages a contribution of its operations in Argentina of €66m EBITDA, compared to the €72m as it had previously foreseen in its forecast announced last May (-8.3 per cent).
Shares in Argentinean companies fell sharply after the results of the Argentine primary election earlier this month. Codere bonds experienced their worst session since their restructuring in 2016. The actions of the gaming firm only declined by around 0.86 per cent, but the company’s debt was reported to be at its worst point since 2016 immediately after the primary results. The €500m in Codere bonds due in November 2021 dropped six cents to 95 cents, the biggest drop since they were restructured in 2016, according to data compiled by Bloomberg. Since then, the stock has recovered slightly.
