Wirecard boosts profit forecast after payment growth jumps

Wirecard won a "clean" opinion from auditor EY for its annual results. PHOTO: REUTERS

BERLIN (BLOOMBERG) - Wirecard AG raised its earnings forecast for the year after first-quarter profit jumped on growing transactions, suggesting allegations of accounting irregularities aren't affecting the German payments company's business.

Increasing its 2019 profit guidance to as much as €810 million (S$1.24 billion) is good news for chief executive officer Markus Braun, who has battled the allegations since January.

Combing emerging digital financial services on a single platform "will drive the formation of one of the world's largest growth markets", Braun - also Wirecard's biggest shareholder - said in a statement on Wednesday.

After a series of Financial Times reports on suspicions of fraud at some units in Asia, Wirecard found accounting quality issues at a software licence business and is bolstering compliance procedures by conducting more audits, tightening payments processes and improving training. Some questions remain as the authorities in Germany and Singapore continue independent probes.

After months of whipsawing share prices stemming from the accounting allegations, Wirecard has been seeking to reassure investors that its business remains on track. It got a welcome boost last month by disclosing a partnership with SoftBank Group Corp, which will improve its access to markets in Japan and South Korea in exchange for a 5.6 per cent stake backed by convertible bonds.

Wirecard shares rose 2.7 per cent at 9:08am in Frankfurt. The stock is about 18 per cent below the level prior to the initial FT reports.

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