IT’S out of the frying pan and into the fire for Steinhoff investors as further information reveals that the company will have to restate its 2015, 2016 and 2017 financial results – as well as earlier years’ results – because of the now well-publicised but as yet unexplained “accounting irregularities”.
The company went into financial free fall with its share price tanking more than 90% since CEO Markus Jooste announced his resignation on December 5.
In a updated Stock Exchange News Service announcement yesterday, the company said that the internal review of the accounting irregularities being investigated by its own managers and consultancy PwC was “progressing but the timeline for completion remains uncertain”.
Steinhoff missed its deadline on Friday to publish its results for its year ended September within the JSE’s three-month deadline.
The group said it was mindful of its obligations to keep the market and other parties informed of material developments arising out of and the results of the review “when in a position to do so”.
In the meantime, Steinhoff says it continues to work with its external auditors to seek to conclude the audit of the company’s 2017 consolidated financial statements as soon as reasonably practicable.
The company yesterday confirmed that these financials would be accompanied by the restated 2016 consolidated financial statements as well as a restated comparative 2015 statement of the company’s financial position.
Steinhoff International Holdings, the former listed holding company of the group (then called Steinhoff International Holdings Limited), will provide “additional insight into the cumulative and consolidated opening balances in the 2016 restated consolidated statement of financial position”, it said.
“Due to the restatements, the 2016 and 2015 financial statements can no longer be relied upon.
“Furthermore, while the internal review and investigation into the accounting irregularities have not yet concluded, the restatement of the financial statements for years prior to 2015 is likely to be required,” the group said.
In addition, the company also confirmed that the “accounting irregularities” also affect the consolidated financial statements of Steinhoff Investment Holdings by virtue of its ownership of certain European subsidiaries until April 1, 2016.
The group says it believes the restatements will not apply to Steinhoff Services Limited, issuer of listed bonds on the JSE.
Steinhoff International started the new year with a 7.5% jump to R5 — despite saying it still did not know when it would release its 2017 results and that its results, going back more than two years, would have to be restated.
Steinhoff, which warned shareholders on December 14 that its 2016 results would have to be restated, said yesterday its 2015 results also “can no longer be relied upon”.
“Furthermore, while the internal review and investigation into the accounting irregularities have not yet concluded, the restatement of the financial statements of Steinhoff International for years prior to 2015 is likely to be required,” Steinhoff said.
“The group continues to work with its external auditors to seek to conclude the audit of the company’s 2017 consolidated financial statements as soon as reasonably practicable,” it said yesterday.
“The company does not believe the restatements will apply to Steinhoff Services Limited, issuer of listed bonds.”
Steinhoff International’s share price jumped 7.5% to R5 yesterday.