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Wirecard seeks to put scandal behind it with results
Payments group agrees to improve processes as auditor signs off 2018 accounts
Wirecard sought to put an accounting scandal behind it on Thursday as the German payments group announced that auditor EY signed off its 2018 accounts and that the supervisory board had agreed measures to improve processes at the company.
Publication of full-year results had been delayed for three weeks after Wirecard disclosed that some employees may face criminal liability in the group’s Singapore unit, where it faces a police investigation into forgery and fraudulent accounting.
According to the auditor’s report, there is so far no evidence that 2018 annual results need to be corrected with regard to Singapore whistleblower accusations. However, it said the ongoing investigation by police in the city state may lead to new insight that could affect the accounting of Wirecard.
The group reported net earnings of €374m for 2018, up from €256m the year before, broadly in line with analyst expectations, according to S&P Global Market Intelligence. The group said it processed payments worth €125bn in 2018 after €91bn in the previous year.
The figures came a day after Wirecard announced that it was raising €900m of new debt from Japan’s SoftBank in the form of a bond that converts into equity. The company on Thursday reported a net cash position of €1.6bn at the end of 2018, on its preferred measure of that metric.
Wirecard reported cash flow from operations of €760m, up 35 per cent on the year before. It said it wanted to slightly increase its dividend, from the €22m paid out to shareholders last year. The company does not conduct share buybacks.
Earnings before interest, tax, depreciation and amortisation rose 37 per cent in 2018, to €560.5m on the back of a 35 per cent jump in revenue to €2.02bn. Wirecard on Thursday confirmed its 2019 ebitda target of €740m-€800m. Analysts had, on average, forecast €770m in ebitda this year.
The company’s results follow three months battling an accounting scandal, after the Financial Times in January revealed the existence of an internal probe into a suspected book-cooking operation involving the group’s chief head of international finance.
Before publication of that news report, Wirecard shares were €162. In initial trading on Thursday morning, the shares were up 2.3 per cent, at €137.10.
Wirecard said its supervisory board had discussed with senior executives “possible measures for improving structures and processes”.
“With its high level of technology and its global presence, Wirecard has entered the next stage of its growth path,” chief executive Markus Braun was quoted in a company statement.
The group’s press conference will start at 10am German time in Aschheim on Thursday.
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