Codere Cuts Profit Forecast by €20 Million Due to Discrepancies in Latin American Divisions
Codere is examining some discrepancies in the financial statements of a handful of their Latin American divisions for the initial six months of the year. They’re cautioning that this could reduce their overall profits for the year by as much as €20 million.
Preliminary investigations indicate that these unidentified divisions may have overstated their performance by an amount ranging from €13 million to €18 million. This will ultimately impact their full-year earnings before factors such as interest, taxes, and depreciation.
However, Codere asserts that they haven’t discovered any issues with their cash flow, and they haven’t uncovered any evidence of funds being improperly withdrawn.
The company stated, “This is an isolated incident and only affects the figures for these specific markets this year.”
They’re going to engage an independent and reputable external expert to examine the situation. Codere mentioned that the findings “will be disseminated through the appropriate channels.”
During the initial nine months of the initial six months of 2019, Codere’s net loss diminished by 78%, despite political instability in Argentina (Codere’s largest market in 2018) leading to a 36.4% reduction in EBITDA in the nation.
The organization’s total EBITDA was €165 million, of which €114.6 million originated from Latin America. Of the company’s Latin American EBITDA, €34.1 million came from Argentina, €61.6 million from Mexico, €5.8 million from Panama, €10 million from Uruguay, and €3.1 million from Colombia.
The business had previously predicted full-year EBITDA to be between €280 million and €290 million, signifying the new forecast figure will be between €260 million and €270 million.
In other news, Codere also declared the departure of director Alberto Mansanares Secades.
The company’s announcement of his departure cited a portion of Mansanares’ resignation letter, in which he stated that he was resigning for “purely personal reasons, primarily due to the difficulty of coordinating the time commitment required for his position as a proprietary director of Codere with his other professional responsibilities.”
Mansanares also served as a senior partner at the law firm Ashurst, an advisor in the corporate and finance area of the law firm Ontier, and a law professor at the University of Madrid and the IE Law School in Madrid.
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