How Argentina's currency hit Codere's Q1 results

How Argentina's currency hit Codere's Q1 results

Tuesday, May 17, 2016 Totally Gaming

Codere was again hit by regional problems in Latin America as it announced a fall in revenue during Q1 2016.

The gaming operator saw global revenue decrease by 13 per cent to €362.9m compared to the previous quarter and nine per cent year-on-year, while adjusted operating profit of €61.8m was down by 23 and 13 per cent respectively compared to Q4 2015 and Q1 2015.

Codere is a major player in Latin America, operating in countries such as Argetina, Brazil, Columbia and Mexico, and said its global figures were hit hard by currency fluctuations in Argentina, higher gaming taxes in Italy and the volatility in the VIP table business in Uruguay. Several Codere executives will be present to discuss the gaming industry in the LATAM region at this month's Juegos Miami event.

Despite a dip in global earnings and revenue, Codere said that revenue in Spain in the three months to March 31 was up 11 per cent year-on-year to €4.0m ($4.5m). The company said the increase was due to “the evolution of all business segments (AWP, sports betting, bingo) and the launch of the online activity nationwide in September 2015”.

Codere added that adjusted operating profit improved by €2.9m versus Q1 2015, as a result of the cost saving efforts and the increasing revenue. Operating margin grew by six percentage points to 21 per cent, versus the comparable period of 2015, “reaching margin levels similar to those registered before the smoking ban in Spain”.

The improved performance from Codere came as the Dirección General de Ordenación del Juego (DGOJ), which regulates gaming in Spain, said that gross online gaming revenue was up 32 per cent year-on-year to €102.3m in Q1. 

Sports betting was responsible for 50 per cent of online gaming turnover and 57.3 per cent of online revenue in the country, with stakes jumping by 33 per cent year-on-year to €1.3bn. Revenue from casino grew by 104 per cent to €25m, aided by a 90 per cent increase in stakes to €899m.

TotallyGaming.com says: “Codere will hope the recent steps it took to restructure debt can help it to reverse its long-term decline. The company also has exciting plans for Brazil, where it is set to be a major player if and when online gambling is legalised. While Spain is clearly a small percentage of Codere’s overall operations, it can only benefit from the growth of the country’s online gaming market.”  

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