Codere Holds onto its Earnings Goal Despite Difficulties in Argentina – iGB
In spite of the substantial devaluation of the Argentine Peso, Codere is keeping its profit targets for 2019. Argentina is a key area for the company.
Codere Holds onto its Earnings Goal Despite Difficulties in Argentina
In spite of the substantial devaluation of the Argentine Peso, Codere is keeping its profit targets for 2019. Argentina is a key area for the company.
Earlier this month, the Peso dropped sharply after Peronist challenger Alberto Fernandez was projected to win the October election against pro-market incumbent Mauricio Macri in the preliminary elections.
However, Codere stated that while its adjusted earnings projection for Argentina has been lowered from €67 million ($73.97 million) to €72 million to €61 million to €66 million since it released its first-quarter results in May, its overall EBITDA target stays the same, between €280 million and €290 million.
Codere stated, “Despite the depreciation of the Argentine Peso, the group’s numbers remain stable due to the performance of markets such as Mexico and Uruguay surpassing expectations.”
Specifically, adjusted EBITDA rose from €65 million to €70.3 million, an 8.2% year-on-year increase, despite a 29% decrease in Argentina from €24.4 million to €17.3 million over the same period.
Codere emphasized that the robust performance of Mexico, Spain, Colombia, and Uruguay resulted in a 30.5% annual increase in group revenue outside Argentina in the second quarter, rising from €40.6 million to €53 million, suggesting a diminished reliance on the Argentine market.
While Argentina’s revenue decreased by 27.2% annually in the second quarter, dropping from €109.9 million to €80 million, revenue outside the nation expanded by 3.3%, from €266.1 million to €274.9 million.
Despite a 5.6% reduction in overall group revenue during the same period, falling from €376 million to €354.9 million, Codere highlighted that non-recurring expenses in the first half of 2019 were more than 50% lower than in the same period the previous year.
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