Codere pays high price for 2019 auditing blunders

Publishing its full-year 2019 trading results, Bolsa Madrid gambling group Codere SA has recorded corporate net losses of €62 million, representing a 32% increase on the firm’s cumulative €47 million loss recorded during FY2018. 

Codere investors had little to cheer over as the embattled operator recorded declines across all core operating metrics, reporting a 6% drop in group revenues to €1.38 billion (FY2018: €1.47bn).

The Spanish operator has attributed its continued declines to ‘macroeconomic drifts’ impacting its Argentine market presence. Codere accounted for a €90 million depreciation cost, following a further ARG Peso collapse recorded during 2019 trading.   

Impacting the group’s earnings capacity, in 2019 Codere governance sanctioned an overhaul of the group’s accounting structures, increasing the firm’s operating costs, combined with higher tax increases across its core markets.

Publishing its earnings results, Codere posted a 12% decline in group ‘adjusted EBITDA’ to €250 million (FY2018: €282m), as corporate governance stated that all growth verticals were ‘neutralised’ by declines in Argentina and Mexico.

Of note, Codere governance emphasised that the group has maintained capital expenditure below the €100 million mark by introducing cost controls reducing investment in subsidiaries and minimising ‘recurring payments’. 

Closing its 2019 accounts, Codere governance declared a group combined loss of €19 million for year trading. However, net losses widened to €62 million, as Codere chose to absorb group audit restructuring costs during 2019 fiscal trading.

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