The gaming company, Codere, which operates in Spain and Latin America, unveiled its financial report for the year 2019, revealing a decrease of 5.9% in earnings compared to the previous year. This outcome was primarily attributed to currency fluctuations in their Argentinian ventures, counteracting growth in European markets.
Codere’s total income for the twelve-month period concluding on December 31, 2019, amounted to €1.39 billion (approximately £1.19 billion or $1.53 billion). Of this total, the Latin American division contributed €796.5 million, marking a 12.3% year-on-year decline.
The company attributed the reduction in revenue from Latin American operations primarily to the devaluation of the Argentine Peso against the Euro. Income from the Argentinian market dropped by 22.2% to €317.2 million. Furthermore, operations in Mexico, Panama, and Colombia also experienced reductions.
Earnings in Mexico fell by 3.0% to €307.8 million, primarily impacted by a deteriorating macroeconomic environment. Revenue in Panama decreased by 11.9% to €78.2 million due to a market slowdown. Colombia closed three underperforming casinos, resulting in a revenue decline of 18.7% to €19 million.
Across Latin America, Uruguay was the sole market to exhibit year-over-year expansion, with income rising to €74.2 million.
Simultaneously, in Europe, Italy’s income climbed by 2.0% to €343.3 million, propelled by enhanced yields from amusement with prizes (AWP) machines and a surge in the proportion of machines in bars. Spain also recorded revenue growth to €189.8 million, fueled by expansion in Codere’s sports betting and route slot enterprises.
Finally, online business revenue expanded by 34.5% to €59.8 million, driven by income increases in Spain and Mexico, despite facing a challenging year-on-year comparison due to the prior year’s World Cup.
Codere effectively decreased operating expenses by 3.5% in 2019 to €1.07 billion, driven by lower gaming taxes, personnel costs, and other expenditures.
However, the year’s earnings before interest, taxes, depreciation, and amortization (EBITDA) declined by 11.9% to €249.1 million. Profit growth in online, Spain, and Uruguay was counterbalanced by a reduction in Argentina’s contribution — which plummeted by €23.5 million due to the depreciation of the peso — as well as an increase in gaming taxes in Italy and declines in Mexico and Panama.
Following depreciation, amortization, and impairment charges, operating profit was €94.3 million, down 40.5% year-on-year, and down to €82.1 million (down 41.0%) after adjusting for inflation. After accounting for finance-related expenses, Codere reported a pre-tax loss of €32.8 million, while the net loss after tax for 2019 was €61.7 million, an increase of 31.7%.
Coderes earnings took a dip in the last quarter of 2019, falling by 4.7% to €344 million. Both South America and Europe experienced revenue declines, with South America dropping by 7.8% to €193 million and Europe falling by 1.4% to €1.367 billion. However, web-based revenue saw a positive increase, rising by 12.5% to €14.3 million.
Despite a small decrease in operating costs, adjusted EBITDA fell by a substantial 18.3% to €64.7 million. After accounting for depreciation, amortization, and impairment, as well as adjusting for inflation, operating income for the final quarter took a significant plunge, falling by 66.6% to €13 million. Profit before taxes did see an improvement, reaching €0.4 million compared to a loss of €3.2 million in the same period the previous year. However, taxes ultimately resulted in a loss of €7 million for the period, compared to a profit of €1.1 million in the final quarter of 2018.