Operator News
Spain – Codere turns to profit and restructures debt
By Phil - 2 March 2017
Spanish multinational Codere has released its financial results for the quarter and full year ending December.
Codere recorded a net profit of €7.6m in Q4 of 2016 compared to a loss of €39m in the same period the previous year. In Argentina the company achieved accumulated revenues of €535m in Q4, 22 per cent less than in the same period in 2015 due to the depreciation of the Argentine peso against the euro (59 per cent). Adjusted EBITDA for the year totalled €131m, down 16 per cent from the same period in 2015. The accumulative EBITDA margin for the period was 24.5 per cent, 1.8 percentage points higher than in 2015.
According to a statement Codere continues to develop its strategic plan after completing its financial restructuring. In Q4 it took advantage of “its positive results as well as the favourable momentum in the markets to refinance its corporate debt structure, reducing the principal by more than €100m and the average interest of 9 per cent to 7 per cent.” Its results, the company announced, had been affected in 2016 by the announcement of new rates on gaming set to go into force in 2017 in Argentina. These new rates caused a number of strikes in Codere owned gaming rooms which had a negative impact on revenues and EBITDA for Q4 2016 which amounted to €4.4m and €25.5m million respectively.
In addition the company has faced setbacks in Mexico due to the weakening of the Mexican peso following the US presidential election. This coupled with higher marketing investments in Spain, led to a drop in adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to €64m from €81m in the previous year, “distorting the recovery trend shown in previous quarters,” according to the company.
In global terms, turnover in 2016 reached €1,499m, 9 per cent less than in the same period in 2015, mainly due to the devaluation of the Argentine and Mexican peso. In the last quarter of 2016, turnover reached €387m, down 8 per cent from the previous year, the company said.
The Gross Operating Result (Adjusted EBITDA) reached €252m, 14 per cent less than the same period in 2015. In 2016 the company recorded an adjusted EBITDA margin of 16.8 per cent which is 1.2 percentage points below that of 2015. However, the number of machines operated by the company globally increased by about 1 per cent compared to the previous year, reaching a total of 55,060. This increase reflects a growth in the markets in Mexico, Panama and Italy. The total number of Codere sports betting shops has also increased by as much as 8 per cent to 156 locations.
Meanwhile in Spain, revenues improved by 9 per cent to €170m in 2016, reflecting a boost in all business areas, the company said. The average collection of machines improved during this period as well by 10 percent as a result of the investment in products and the improvement in customer loyalty programmes. Adjusted EBITDA improved by 16 per cent to €30m in Spain while the adjusted EBITDA margin improved by 1 percentage point compared 2015.
In Mexico, the accumulated turnover in 2016 reached €330m, 7 per cent less than in 2015 (€355m) due to the depreciation of the peso against the euro (17 per cent). However in local currency, revenues grew by 9 per cent. Meanwhile the Italian market continues to do well. In Italy, revenues increased by 13 percent to €322m. Adjusted EBITDA stood at €26m in 2016, down one per cent from 2015.
