Codere records sales of 397.6 million euros in 1Q 2013

The most notable operations in the first quarter include: the opening of Hotel Casino Carrasco in Montevideo, a benchmark in Latin American entertainment, and the launch in Spain of sports betting in Galicia, Codere being the only company present in all regulated regions the country.

At the close of the first quarter, Codere operated 54,007 gaming machines, 178 gaming halls, 1,206 betting points, 4 racetracks and online betting in Italy. Sales reached 397.6 million euros, 1.4% less than in in the same period in 2012, mainly due to the fall in revenues in Argentina and partially offset by growth in Mexico and Italy. 

Gross Operating Profit (EBITDA) amounted to 62.1 million euros, in line with EBITDA guidance of 60-63 million euros, reflecting a decline, particularly, in Argentina and Italy, and growth in Mexico and Spain. The net result was a loss of 20.9 million euros. Investments in the first quarter totalled 14.6 million euros, of which 6 million correspond to maintenance and 8.6 million to growth initiatives.

The growth in the number of gaming machines was concentrated in Italy and Argentina, although the total number of gaming machines fell 2.1% to 54,007 due to the rationalization of the stock in Spain and the temporary closure of gaming halls in Mexico.

International activity

In Argentina, sales reached 147.8 million euros, down 7.9%, and EBITDA totalled 27.4 million euros, 41.7% less than in 1Q12, mainly due to the implementation of the smoking ban since October 2012 and the depreciation of the local currency against the euro.

In Mexico, sales rose 3.6% to 104.8 million euros, mainly due to the consolidation of the operations acquired from ICELA. During this quarter some casinos have been temporarily closed, which resulted in a decrease in the number of terminals of 15.3% compared to 1Q12. Additionally, the average fell slightly (-0.8%). Despite these incidents, EBITDA increased by 20.1% to 26.9 million euros and the operating margin increased from 22.1% to 25.7%.

In Italy, sales rose 4.5%, to 67.6 million euros thanks to the growth in owned terminals (as a result of the acquisition Dalla Pria Services) and third-party machines connected to the network. EBITDA decreased to 6.6 million in response to higher gaming taxes on VLT, the deterioration of the bingo business and decline in daily averages on VLT and AWP machines, factors arising from the decline in private consumption as a result of the country's economic recession. 

In Spain, although total sales declined 2.3% to 38.5 million euros due to a reduction in average daily revenue per machine as a result of the fall in consumption, it is important to highlight the growth in revenues from the sports betting business as a result of the increase in the number of retail outlets and the increase in revenues in these premises. At the close of the quarter we operated a total of 1,031 betting shops, 46% more than the same period last year thanks to the deployment of this business in Galicia and Valencia. Thanks to a reduction in expenses, EBITDA increased from 2.7 to 5.1 million euros, and the operating margin jumped to 13.2 from 6.9% in the first quarter of 2012.

1Q 2013 milestones

In March, CODERE inaugurated Sofitel Montevideo Hotel and Casino Carrasco in Uruguay, a National Heritage building, the rehabilitation and operation of which is managed through Carrasco Nobile, a consortium led by Grupo CODERE. This Hotel Casino, which holds an operating license for 30 years, has established itself as a benchmark in Latin America and has 116 rooms, 405 gaming machines and 23 casino tables. 

In Spain, CODERE Apuestas, through Grupo COMAR, launched sports betting group in Galicia, where the company will operate through 333 businesses in the hospitality sector and 18 gaming facilities, in addition to specific betting shops. The company is the current market leader and the only company operating in all regions with regulated gaming: Madrid, Basque Country, Navarre, Aragon, Valencia and Galicia.

The company also participated in several key events for the industry during the quarter. The CODERE Foundation sponsored 2nd edition of the Course "Prevention of money laundering and terrorist financing", organized by the Autónoma University of Madrid, and presented new publications on the gaming industry (Anuario del Juego, el Código del Juego and En torno al juego de azar) in a event chaired by the Secretary of State for Infrastructure, Transport and Housing of the Ministry of Development. 

The company also participated in ICE 2013, through various presentations and panel discussions related to gaming.