Steinhoff posts $1.3 billion loss in delayed 2018 results
today Jun 19, 2019
African retailer Steinhoff on Tuesday reported a 1.2 billion euro (£1.07 billion) loss for the 2018 fiscal year, in a much-delayed earnings report revealing the impact of an accounting fraud put at $7.27 billion.
Steinhoff, which is also listed in Frankfurt, delayed the results after finding holes in its accounts in December 2017, shocking investors who had backed its reinvention from a small South African furniture outfit into a discount furniture retailer straddling four continents.
The owner of Mattress Firm in the U.S., Fantastic chains in Australia and Conforama in France, as well as Dunns fashion retailer in South Africa said the loss came in at 1.2 billion euros in the year ended September 2018 compared with a loss of 4 billion euros in fiscal 2017, in the absence of huge writedowns.
Segmental operating profit from continuing operations and before capital items rose by 13% to 504 million euro.
"During the reporting period the group and its operating entities had to deal with the consequences of the events at the Steinhoff parent company level. This had a severely negative impact on the group's operational results," the company said in its 328-page annual report posted on its website.
An investigation by auditor PwC released in March found eight people, including former Steinhoff executives, were involved in a complex scheme where potential intercompany transactions worth 6.5 billion euros were fraudulently recorded as external income to prop up profits and hide costs in money-losing subsidiaries.
Shares in Johannesburg-listed Steinhoff, which have tumbled more than 97% since December 2017, closed more than 2% higher.
The retailer has delayed releasing 2017 and 2018 results several times as it waited for the findings of the PwC investigation and audit process of its external auditor Deloitte.
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