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Steinhoff Investments to report heavy losses

Steinhoff Investment Holdings, said yesterday, it expects to report heavy losses for the year to end September. Picture: Henk Kruger/African News Agency/ANA

Steinhoff Investment Holdings, said yesterday, it expects to report heavy losses for the year to end September. Picture: Henk Kruger/African News Agency/ANA

Published Dec 11, 2020

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DURBAN - Steinhoff Investment Holdings, a wholly-owned subsidiary of Steinhoff International Holdings, said yesterday, Thursday, it expects to report heavy losses for the year to end September, reversing a profit of 7 971.6 cents compared to a year earlier.

Steinhoff Investments said in a trading update that there was a reasonable degree of certainty that its headline loss a share was expected to be between 12 500 cents a share and 13 500c compared to headline earnings per share (Heps) of 7 971.6c reported last year.

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However, the group did not disclose the reasons behind the expected decline in earnings.

Steinhoff Investments is the issuer of variable rate, cumulative, non-redeemable, non-participating preference shares with a capital value of R1.5 billion.

The group said the preference shares were listed on the JSE, adding that following the events of December 2017, the publication of the consolidated financial statements was not completed within the prescribed time frame.

“The listing of the preference shares was suspended by the JSE, effective March 1, 2018 and it has remained suspended since that date,” the group said.

The parent company is still trying to address the 2017 accounting scandal, which led to a decline of more than 95 percent in its share price and losing more than R200 billion in market capitalisation.

Steinhoff Investments also expects to report a loss of between 22 500c and 23 500c in the upcoming results compared to the earnings per ordinary share (Eps) of 5 749.1c reported last year.

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The company warned the market during the September 2019 results presentation released in June that the ongoing Covid-19 pandemic was causing significant disruptions both on the supplier and demand side for the group. However, its management said it was taking an active approach, implementing a range of mitigating strategies to protect profitability and cash flow.

The warning came after the group reported an 8.5 percent increase in revenue from continuing operations to R69.7bn and profit for the period improved to R3.94bn compared to a loss of R2.91bn reported in 2018.

In August, Steinhoff International released a trading update for the nine months to end June which showed a 6 percent decline in revenue from continuing operations, negatively impacted by operational and economic challenges as well as Covid-19 outbreak.

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The group lost almost four months of trading worldwide due to lockdown measures to contain the spread of the pandemic. However, it said its stores were allowed to trade at the end of June but a significant amount of trade was lost while the stores were closed.

Steinhoff Investments’ full-year results are expected to be released on or about December 17.

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