Wirecard hangs on to full-year estimates, stays silent on audit

Wirecard didn't further address an inconclusive audit by KPMG. PHOTO: REUTERS

FRANKFURT (BLOOMBERG) - Wirecard said it still expects full-year earnings to rise, even as some business customers struggle with the lockdown.

Earnings before interest, taxes, depreciation and amortization (Ebitda) will be 1 billion euros (S$1.54 billion) to 1.2 billion euros in 2020, the company said in its preliminary first-quarter earnings statement on Thursday (May 14). Adjusted first-quarter Ebitda rose 29 per cent to about 204 million euros.

The German payment processor didn't further address an inconclusive audit by KPMG released last month that was meant to clear the company of accusations about its accounting practices. Chief executive officer Markus Braun has dismissed calls to step down instead saying the company will implement sweeping measures to improve compliance and control.

The company has said it would expand its management board to seven members and appoint a chief compliance officer. On Wednesday, it appointed Joerg Brand, First Data GmbH's former management board spokesman and head of sales, to oversee Wirecard's risk-management division.

The independent KPMG audit of Wirecard said it was unable to obtain the data it needed and criticized the company for internal "shortcomings" and an unwillingness by its third-party partners to contribute to the report.

Germany's financial regulator said it is reviewing the KPMG report on Wirecard to see if it contains new information on whether the company is a reliable owner of a bank. BaFin said with every bank it looks at the reliability of the owners when a report like KPMG's comes out.

Wirecard shares have plunged 35 per cent in the last 12 months through Wednesday.

The full first-quarter statement will be published on June 16.

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