Argentine woes see Codere issue profit warning

Closing Monday 26 August trading, Bolsa Madrid gambling group Codere SA has issued a profit warning after admitting that a further Argentine Peso devaluation has impacted the firm’s 2019 expectations.

Codere cannot escape Argentina’s economic volatility caused by the nation’s shock primary election results as voters turned against President Mauricio Macri’s government, backing the ‘Frente de Todos’ Peronist coalition.

The firm has accounted for a number of Argentine impacts, detailing that it anticipates a 29% decline in ARG market earnings as its biggest operational division fails to hit the €100 million revenue mark during Q2 2019 trading (projected €80 million).

The statement read: “Faced with recent events in Argentina following the results of the primary elections, which have generated a significant devaluation of the Argentine peso, as well as a deterioration in the valuation of the country’s sovereign debt and the majority of shares listed on its stock market, the company makes public information regarding the contribution of our local business unit to the group’s results as a whole and to the impact of the devaluation of the peso on our expectations of results in 2019.”

Mitigating Argentine economic realities, in 2018 Codere governance was allowed to adjust the firm’s corporate auditing frameworks by separating its ARG division impacted results from its core business reporting.

Despite its continued Argentine woes, Codere still expects to deliver improved results on 2018 trading. It anticipates an adjusted EBITDA of €70 million (Q2 2018: €65m), with the firm detailing solid LATAM performances registered in the markets of Mexico, Colombia and Uruguay. H1 results will be published on 13 September.

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