Codere retains EBITDA guidance despite Argentina woes

Codere has retained its earnings guidance for 2019 despite a sharp fall in the value of the peso currency in Argentina, one of the operator’s key markets.

The peso nosedived earlier this month in the wake of a primary election result that projected a victory in the October general election for Peronist opposition candidate Alberto Fernández, against market-friendly incumbent Mauricio Macri.

However, Codere said that although adjusted earnings projections for Argentina had been cut since the publication of its first-quarter results in May from between €67m (£60.28m/$73.97m) and €72m to between €61m and €66m, its overall EBITDA guidance would remain unaltered at between €280m and €290m.

Codere said that “group guidance remains stable despite Argentine peso devaluation thanks to overperformance in markets such as Mexico and Uruguay, among others”.

Specifically, adjusted EBITDA had improved overall by 8.2% year-on-year from €65.0m to €70.3m, despite a 29% decline in Argentina over the period from €24.4m to €17.3m.

Strong performances in Mexico, Spain, Colombia and Uruguay has seen group earnings outside Argentina in the second quarter had rocketed from by 30.5% from €40.6m to €53.0m year-on-year, Codere said, demonstrating less reliance on the Argentinian market.

Despite revenue in Argentina slumping by 27.2% from €109.9m to €80.0m year-on-year in the second quarter, revenue outside the country improved by 3.3% from €266.1m to €274.9m.

Although total group revenues have declined over the period by 5.6% from €376.0m to €354.9m, Codere cited a decrease of more than 50% of non-recurring expenses in the first half of 2019 versus the corresponding period last year.