Codere clarifies LatAm financial inconsistencies

20 November 2019

Gambling operator Codere has altered its financial results for the first half of the year after an investigation into accounting inaccuracies uncovered a number of errors with the reporting for its Mexico, Colombia and Panama operations.

The operator said its board of directors will now take the appropriate decisions in disciplinary terms and organisational matters against those responsible.

Codere engaged the law firms Kroy Abogados and Alvarez & Marsal Mexico to carry out the investigations, after an initial probe by the operator found inconsistencies in the financial reports of some of its Latin American subsidiaries.

Based on the findings of both legal advisors, Codere has reduced operating revenue from Mexico in the six months to June 30 2019 by €9.2m (£7.9m/$10.2m). Operating revenue in Colombia has also been lowered by €1.2m for the period.

Codere also reduced adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in Mexico by €14.8m, as well as cutting €1.3m from its Colombian operations and €400,000 in Panama. The operator said the figures were in line with the initial findings in its own investigation.

However, Codere said the investigation did not detect any inappropriate cash outflows, which was again in line with its initial probe.

Codere also noted that the Kroy Abogados and Alvarez & Marsal investigation did not find any evidence of in accounting inconsistencies in other countries, nor in any other reporting periods.

Last week, Codere announced a year-on-year increase in net loss for the third quarter down to struggles in its key South America markets of Argentina and Panama, as well as declines in Spain.

Operating revenue for the three months to 30 September 2019 totalled €343.4m, down 3.6% from €356.2 in the same period last year. Mexico revenue dipped 6.5% year-on-year to €75.9m in Q3, while Panama revenue also fell by 8.0% to €19.7m and Colombia slipped 21.4% to €4.8m.