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Spain – Codere reports inconsistenct results in Latin America

After Spanish company Codere, reported “inconsistencies” in the latest results for its Latin American subsidiaries, the value of the firm’s shares fell more than four per cent on the Madrid Stock Exchange.

The company closed the trading day on Tuesday with a fall of 4.1 per cent at a price of €3.14 per share, meaning the fifth consecutive day in decline adding up to accumulated loss of 13.3 per cent since October 1 when it closed at €3.57 per share.

The stock market decline happened after Codere communicated to the National Securities Market Commission (CNMV) that it had detected inconsistencies in the accounts of its Latin American subsidiaries in 2019.

“The preliminary analysis of these inconsistencies estimates the maximum impact in the area of 13/18 million Euros on the results published in June 2019 and would reduce our expectation of Ebitda (gross operating profit) adjusted for the entire year by approximately 20 million Euros,” said the company.

Codere stressed that preliminary investigations have not yet detected an additional impact on the liquidity situation of the company, nor “inappropriate cash outflows,” so in their opinion, it is “an isolated incident that only affects the results of these subsidiaries this year.”

For this reason, the board of directors have commissioned an external advisor to prepare an analysis to identify “any relevant aspect” related to inconsistencies and to ensure transparency in compliance with the best accounting practices.
The inconsistencies were reported on Monday and the company said it would take immediate action on the issue to “ensure that they do not occur again,” the company said. “The company’s management team remains fully committed to the group’s objectives and is already working on an action plan to mitigate the impact of this situation on the results of the year.”
Im August meldete Codere im zweiten Quartal des laufenden Jahres einen bereinigten Bruttobetriebsgewinn (EBITDA) von 70.3 Mio. Euro, was einer Steigerung von 8.2 Prozent im Vergleich zu den 65 Mio. Euro entspricht, die das Unternehmen im gleichen Quartal 2018 erzielte. Den Daten zufolge Wie der National Securities Market Commission (CNMV) mitgeteilt wurde, konnte das Unternehmen im zweiten Quartal des Jahres den geringeren Beitrag seines Geschäfts in Argentinien kompensieren. Dennoch wurden die Ergebnisse von Codere durch die jüngste Abwertung des Peso im Zuge der Verschärfung der argentinischen Wirtschaftskrise beeinträchtigt.

Infolgedessen meldete das Unternehmen im zweiten Quartal in Argentinien ein bereinigtes EBITDA von 17.3 Millionen Euro, was einem Rückgang von 29 Prozent im Vergleich zum Vorjahreszeitraum entspricht. Codere betonte jedoch, dass der Anstieg des gesamten bereinigten Bruttobetriebsgewinns im zweiten Quartal auf die „solide Leistung“ in Mexiko, Spanien, Kolumbien und Uruguay zurückzuführen sei, trotz des Rückgangs von 29 Prozent, den das Unternehmen auf dem argentinischen Markt verzeichnete.