Codere is examining inconsistencies in the initial six-month financial reports of several of its Latin American branches. The firm has cautioned that this could potentially decrease its full-year profits by as much as €20 million.
Initial inquiries suggest that these unidentified subsidiaries might have exaggerated their reported performance by a sum ranging from €13 million to €18 million, which will ultimately influence its full-year EBITDA. Codere emphasized that it has not detected any additional impact on its financial liquidity, nor has it discovered any improper cash outflows.
The company stated: “This is viewed as an isolated event and only affects this year’s figures in these specific regions.”
An “independent and highly respected” external advisor will lead the investigation, Codere announced, and the outcomes “will be disseminated publicly through appropriate channels.”
During the initial six months of 2019, Codere’s net deficit experienced a significant reduction of 78%, even though political instability in Argentina, which was Codere’s most prominent market in 2018, resulted in a 36.4% decrease in EBITDA within the nation.
The company’s overall EBITDA reached €165 million, with €114.6 million originating from Latin America. Of this Latin American EBITDA, Argentina contributed €34.1 million, Mexico contributed €61.6 million, Panama contributed €5.8 million, Uruguay contributed €10 million, and Colombia contributed €3.1 million.
The company had previously projected full-year EBITDA to be within the range of €280 million to €290 million. However, the new anticipated figures have been adjusted to a range of €260 million to €270 million.
In separate news, Codere also revealed the departure of director Alberto Mansanares Secades.
The company’s announcement regarding his resignation included a portion of Mansanares’ resignation letter, where he stated that his decision to leave was “attributable to strictly personal circumstances, primarily stemming from the challenge of harmonizing the time commitment demanded by his role as a proprietary director of Codere with his other professional responsibilities.”
Mansanares also holds the position of a senior partner at the law firm Ashurst, serves as an advisor in the corporate and finance sectors at the law firm Ontier, and is a law professor at the University of Madrid and the IE Law School in Madrid.
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