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Steinhoff set to release its delayed 2018 earnings report

Jun 18 2019 06:00
Jan Cronje, Fin24

Retailer Steinhoff is set to release its long-delayed audited group financial results for 2018 on Tuesday. 

Steinhoff’s share price has fallen by over 90% since December 2017 when its former CEO Markus Jooste abruptly resigned in an accounting scandal. 

Once one of South Africa’s largest listed companies by total market value, it has since fallen out of the top 100 largest JSE firms by market capitalisation.


In its 2017 earnings report, Steinhoff had predicted that its 2018 results would show reduced net sales due to disposals, a weak global economy and stronger competition.  It noted these factors had been "compounded by the reputational damage associated with the disclosures in December 2017," constraints from supplier credit lines and uncertainty associated with the ongoing investigations.

The retailer also flagged higher operating expenses for 2018 due to costs associated with investigations and its restructuring effort.

Delayed results 

The Stellenbosch-headquartered conglomerate had delayed publishing its 2017 and 2018 earnings reports to give auditors PwC time to complete a 15-month forensic probe into its books. 

It had hoped to release its audited financial statements soon after receiving the PwC report in mid-March 2019, but announced in April that due to the "exceptionally complex" issues PwC highlighted, the 2017 results would be further delayed until early May, and the 2018 results until June 18.

While Steinhoff views the full 3 000 page investigation as privileged, it did publish a 11-page overview of the probe’s key findings in March, which revealed that a "small group" of former executives inflated the group's profit and asset values for years. 

At a Parliamentary committee meeting in June, Steinhoff leadership confirmed that its former CEO Markus Jooste was one of eight people implicated in the report. 

The 2017 results 

Steinhoff's 2017 restated and audited results, published on March 7, showed an operating loss of €3.67bn for the financial year ended September 2017.

The retailer publishes its results in euros as it has its primary listing in Europe. Its 2017 report also found that, in March 2017, Jooste was awarded a bonus payment of €500 000 (R8m at current exchange rates) without requisite approval. Steinhoff said the group's board was still committed to using clawback provisions to recoup bonuses, but did not provide further details.

Jooste, meanwhile, appearing before Parliament in September 2018, denied any wrongdoing and blamed the company’s woes on a former business partner. 

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