Scandal-plagued retail conglomerate Steinhoff International has published its delayed 2018 financial year statement, reporting a €1.2 billion ($1.96 billion) loss for the period.
The result was impacted by one-off expenses, such as
professional fees of €117 million, goodwill impairments of €7 million, plant impairments of €16 million, as well as other asset impairments of €46 million.
Steinhoff delayed the reporting of its 2017 and 2018 annual financial statements due to PWC’s investigation into the
€5.6 billion gap in its finances being “significantly more complex than initially anticipated”.
“The last eighteen months have been by far the most challenging in the history of Steinhoff International Holdings N.V.,” Steinhoff chief executive Louis du Preez wrote in a statement to the company’s stakeholders.
“Our priority through this period has been to re-establish stability for the business by achieving a financial restructuring. This process has been highly complex and demanding but we aim to complete this in the near term.”
Steinhoff International owns and operates the Freedom Furniture, Fantastic Furniture, Snooze, Best & Less and Harris Scarfe brands in Australia, as well as Mattress Firm in the US, Poundland in the UK, Pepco in Europe, amoung others.
In response to the PwC investigation, which found evidence of at least €6.5 billion in fictitious and irregular transactions made over the course of a decade, Steinhoff management has implemented a remediation plan to improve standards of compliance, disclosure and professional conduct within the business.
“We are making fundamental changes across the organisation, placing a renewed focus on the customer, as well as implementing [a] tighter control of capital,” du Preez wrote.
“These steps will enable us to establish a new foundation for increasing free cash generation, to reduce the level of debt and, over time, to create value for our stakeholders.”
Du Preez acknowledged the uncertainty and risk that surrounds the implementation and feasibility of this strategy.
“We do not underestimate the scale of the task ahead, nor the complexity and difficulty of the challenges we must overcome, but the entire team is focused on the objective,” du Preez wrote.
