Codere’s Net Loss Diminishes Despite Argentine Peso Devaluation

In spite of the decline in value of the Argentine money, Codere’s financial losses still diminished – iGB

Codere’s net loss in the second period decreased by more than three-quarters year-over-year, despite the sharp drop in the value of the Argentine peso, which significantly affected income in the company’s previously largest market.

Codere’s income in the period totaled €354.7 million, down 5.7% year-over-year. Income growth was seen in several key areas, including Mexico (up 5.3% to €84.2 million), Italy (up 4.5% to €85.1 million), and Spain (up 2.6% to €47.5 million). However, income from Argentina fell 27.2% to €80 million.

The main reason for the drop in Argentine income was the sharp devaluation of the Argentine peso in August, driven by the primary election outcomes, which predicted that Peronist opposition candidate Alberto Fernandez would defeat the more market-friendly incumbent Mauricio Macri in the October general election. On August 8, one US dollar could be exchanged for 44.80 Argentine pesos, while on August 14, the exchange rate had risen to 60.24 Argentine pesos.

Online gambling income also increased by 31.1% to €14.9 million, while Panama income fell 15.2% to €19.2 million, and fell 6.3% to €5.

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However, the firm observed a rise in earnings due to a 7.8% drop in operational costs to €266.7 million. Gaming tax expenses declined by 8.8% to €123.7 million, while personnel costs fell by 12.3% to €61.9 million. Consumption and other expenses also decreased this quarter.

The firm’s depreciation and amortization expenses rose by 12.3% to €42.7 million, bringing the company’s operating profit to €36.9 million, a 5.5% increase from the previous year, and an operating profit of €36.2 million after inflation, a 3.7% increase from the previous year.

Financial losses climbed by 4.1% to €30.1 million, while taxes were €11.9 million, resulting in a total loss of €4.8 million, an 86.7% decrease from the previous year.

In the first half of 2019, operating revenue dropped by 6.2% to €712.4 million, primarily due to a 30.9% decrease in revenue from Argentina to €160.7 million, while revenue from Mexico, Italy, Uruguay, and Spain all increased.

Due to the decline in revenue from Argentina, Italy became Codere’s largest market to date, with revenue of €171.6 million.

Total operating expenses fell by 7.6% to €538.5 million. The company’s gaming tax bill decreased by 9.8% to €250.7 million, while personnel costs fell by 10.1% to €122.8 million. Depreciation and amortization expenses rose by 8.3% to €83.7 million, resulting in an operating profit of €77.9 million, a 7% increase from the previous year, while operating profit after inflation increased by 1.7% to €74 million.

Financial costs fell slightly to €58.9 million, while taxes totaled €22.2 million, resulting in a total loss of €8.5 million, a 78% decrease from the previous year.

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