Nobody thought that Steinhoff’s latest interim results were going to be pretty, but there are some rather staggering figures being thrown around.

The results account for the six months prior to March 31, 2018, and are the first released since Markus Jooste resigned as CEO in December.

The company remains under investigation from PwC, and therefore the numbers in the latest report might be contested at a later point, but let’s see where we stand at present.

Here’s Moneyweb:

The group reported an operating loss for the period of €381 million (R6.1 billion), compounded by net finance costs of €224 million (R3.6 billion). Steinhoff’s total loss for the period was €599 million (R9.6 billion)…

Steinhoff noted that in “all periods presented, the group’s current liabilities exceed the current assets”. This means that it is factually insolvent. It has however thus far avoided liquidation by reaching agreements with creditors for them not to call in loans.

Just shy of R10 billion, which will definitely leave a mark.

As for the ongoing investigation:

In her report attached to the results, chairperson Heather Sonn also reiterated that PwC is on track to deliver the findings of its forensic investigation before the end of 2018. The group’s auditors, Deloitte, are on record as saying that they will not sign off on any results until PwC’s final report is delivered.

Sonn acknowledged that in the course of the investigation “certain transactions that may not have been entered into on an arms’ length basis have been identified”. Steinhoff is working to identify and correctly account for these transactions “with a focus on determining the extent of the relationships and the recoverability of loans and assets”.

Steinhoff remains hopeful that they can reach agreements with creditors that “will ensure that the servicing costs and repayment obligations are sustainable”, but it’s a fine balancing act.

Don’t forget that Christo Wiese is suing Steinhoff for R59 billion, and he’s as angry as anyone right now. When the news broke, Wiese went on Radio 702 and said that the extent of the restatements was “mind-boggling”, asking how it was possible the books could have been manipulated so badly for over a decade.

You’re not alone there.

[source:moneyweb]