Codere's operating income down 6.7% in Q1, softened by Mexico and Spain growth

Codere announced its results for the first quarter of 2019, and remarked it has maintained its profitability through growth performance in Mexico and Spain. The company has obtained an operating income of 357.7 million euros (USD 400.9 M), 6.7% less than in the same period of the prior year due to the peso depreciation against the euro in Argentina, with a USD 47 million fall. This was compensated partly by the positive evolution in Mexico (up 7.1 million euros), online activity (up 6.1 million euros) and Spain (up 3.7 million euros).

In Mexico, revenues increased by 9.3%, compared to the first quarter of 2018, driven by the 10.3% growth in the average number of machines and the favorable trend of the exchange rate (5.4% depreciation of the euro against the Mexican peso). As for Spain, operating income in the first quarter grew by 8.2% year-on-year, driven by the increased income in land-based sports betting and the bar machines segment, with 26.1% and 6.8% more units installed.

Codere has thus achieved a gross operating profit (adjusted EBITDA) of 68 million euros (USD 76.2 M) with an increase of 1.3 points in the margin, which reaches 19%. Operations cost decreased by 7.3% to 271.8 million euros as a result of the costs reduction in Argentina, due to the devaluation of its currency.

“The numbers reflect, once again, the impact of the operational and efficiency improvements implemented, and the strength of the company in a severe environment in terms of tax increases, especially in Argentina and Italy, and the devaluation of Latin American currencies,” said CEO Vicente Di Loreto.

In terms of installed capacity, machine positions grew by 0.3%, reaching 56,764 units. In addition, the number of gaming halls remained unchanged at 148; while sports betting venues climbed from 443 to 478 and the number of bars remained stable, at around 10,000.

See full Codere earnings results in 2019 first quarter.