Scandal-hit Steinhoff reports $400 million loss in half-year earnings

PUBLISHED: Fri, 12 Jul 2019 14:26:21 GMT

JOHANNESBURG (Reuters) – South African retailer Steinhoff reported a 356 million euros ($401 million) half-year loss from continuing operations on Friday, as the damage from a massive accounting scandal drags on.

Steinhoff first flagged holes in its accounts in December 2017 — the warning shot for an accounting fraud since put at over $7 billion — shocking investors that had backed its transformation from a small South African outfit to a discount furniture retailer spanning four continents.

The owner of Mattress Firm Inc in the United States, Fantastic chains in Australia and Conforama in France said the loss from continuing operations came in at 356 million euros in the six-months ended March compared with a loss of 392 million euros a year earlier.

Steinhoff, which is also listed in Frankfurt, blamed the loss on the cost of advisors and professional fees as it cleans up its balance sheet.

Advisory fees for the period amounted to 82 million euros, which included 11 million euros for forensic investigation and technical accounting support, and 30 million euros for creditor adviser fees.

“While every effort is made to limit costs, we expect this to remain our reality for some time,” the retailer said in its 97-page half-year unaudited report.

Net sales from continuing operations increased by 3% to 6.8 billion euros from 6.6 billion euros, with strong contributions from Pepkor Europe and Pepkor Africa.

At 1105 GMT, shares in Johannesburg-listed Steinhoff jumped 4.72%, while in Frankfurt they were up 8.9%.

($1 = 0.8885 euros)

Reporting by Nqobile Dludla; Editing by Mark Potter and Louise Heavens

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