Steinhoff results
STEINHOFF International fell nearly 10 percent during early trade on the JSE yesterday, despite the retailer saying it narrowed its losses to €1.19 billion (R19.53bn) for the year to end September 2018 from a €3.99bn loss in 2017.
The group reported a 3 percent increase in revenue to €12.83bn from €12.49bn the prior year, while segmental earnings before interest, tax, depreciation and amortisation from continuing operations increased 12.74 percent to €770 million.
The group said in both periods operating results from continuing operations were impacted by once-off expenses, including professional fees of €117 million, impairment charges relating to goodwill and other intangible assets of €7m, impairment charges related to property, plant and equipment of €16m and impairment charges relating to other assets of €46m. However, Steinhoff did not pay professional fees in 2017, but overall impairment charges amounted to €540m.
It said basic and diluted loss a share from continuing operations was 17.6 euro cents a share, improving on 18.8 euro cents a share compared to 2017.
The group published the results in a 328-page annual report and said the last 18 months had been by far the most challenging in its history.
It said the accounting irregularities in December 2017 that led to a more than 95 percent decline in its share price and wiped out more than R200bn in market capitalisation continued to haunt its future.
The group said total assets declined to €16.37bn for 2018, compared to €17.51bn in 2017, and a net debt of €9.1bn at the end of the period.
“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,” it said.
The group said it would however continue to work hard to recover from the consequences of the 2017 scandal.
“While we still have a long way to go, including resolving the various legal proceedings that have been initiated against the company, progress is being made. At operating company level a number of key subsidiaries continued to report solid performances demonstrating their inherent value,” Steinhoff said.
Nesan Nair, a senior portfolio manager at Sasfin Securities, said the company does not have enough scope to continue reporting losses. “The losses are getting smaller, but then again, the company cannot exist if it is only making losses,” Nair said.
Steinhoff shares closed 8.67 percent weaker at R1.37 on the JSE yesterday.