Wirecard postpones issuing annual results again

Fintech says not all audit procedures completed and puts AGM back until August

Wirecard has postponed the publication of its 2019 annual results for the third time this year as its auditor EY needs additional time to finish its work, the German payments company said in a regulatory statement issued after markets closed on Monday night.

The Aschheim-based group is facing accusations of accounting manipulation raised by whistleblowers and reported by the Financial Times.

Its shares have fallen by more than a third since late April when it published the results of a company-commissioned special audit by KPMG. The Big Four accountancy firm could not verify that the “lion’s share” of Wirecard’s operating profits between 2016 and 2018 were genuine.

The fintech company had long been regarded as one of Germany’s most promising technology companies and in 2018 replaced Commerzbank in the country’s Dax index.

On Monday night, it disclosed that it would not be able to publish its annual results on June 4 as previously announced as “not all audit procedures have yet been completed” by EY.

“The publication of the consolidated financial statements and the annual press conference will take place on June 18,” the company said. 

“Within the scope of the completed parts of the audit procedures, Wirecard has not yet been informed of any material findings. However, not all audit procedures have yet been completed.”

Wirecard also said that it would postpone its annual shareholder meeting, which had been scheduled to take place on July 2, to August 26. 

Wirecard told investors that it expected “an unqualified audit opinion” from EY and that it “assumes that there will be no significant deviations” from the preliminary, unaudited 2020 results the company published in February.

Back then, the company said that full-year revenue was up 38 per cent year on year to €2.8bn while earnings before interest, tax, depreciation and amortisation increased 40 per cent to €785m.

In its special audit, KPMG raised questions over the company’s accounting of revenue and cash with regard to its business with third-party business partners in countries where the German group does not own its own licences. According to KPMG, such activities were responsible for “the vast majority of sales revenues generated” at the three key Wirecard subsidiaries. 

Wirecard counted the sales of these business partners as its own sales, and their costs as its costs. KPMG also pointed out that it saw arguments against treating monies held in escrow accounts that were used to clear transactions with these business partners as cash on Wirecard’s balance sheet. 

Wirecard rejected KPMG’s points and argued that its accounting was in line with IFRS standards and approved by EY. 

Wirecard is subject to investigations by Germany’s financial markets regulator BaFin, the country’s Financial Reporting Enforcement Panel and lawsuits from shareholders. Deka Investment, one of Wirecard’s largest shareholders, has called for the dismissal of chief executive Markus Braun. Investment group TCI Fund Management filed a complaint against Wirecard executives in Munich.