Retailer Steinhoff has posted a loss of €1.19bn (R19.35bn at current exchange rates) for the year ended September 2018, notes a Fin24 report. The Stellenbosch-headquartered conglomerate published its delayed 2018 audited earnings report after the close of SA markets yesterday.

The €1.19bn loss compares to a restated loss of €3.99bn (roughly R65bn at current exchange rates) for the 12 months ended September 2017.

Steinhoff reports its earnings in euros as it is domiciled in Amsterdam and has its primary listing on the Frankfurt Stock Exchange. The group had delayed publishing its 2017 and 2018 earnings reports to give auditors PwC time to complete a 15-month forensic probe into its books.

Steinhoff instituted the probe in December 2017 after its CEO Markus Jooste abruptly resigned in an accounting scandal.

While Steinhoff views the full 3 000 page PwC investigation as privileged, it did publish a 11-page overview of the probe’s key findings in March which revealed that a ‘small group’ of former executives inflated the group's profit and asset values for years.

At a parliamentary committee meeting in June, Steinhoff leadership confirmed that Jooste was one of eight people implicated in the report. Jooste has denied any wrongdoing. The group hopes to publish its 2019 half-year results on 12 July.

Full Fin24 report

Steinhoff spent €117m (R1.9bn) in the financial year on lawyers and consultants to deal with the fallout from the scandal, Netwerk24 reports.

It represents approximately 4% of the entire group’s sales.

The amount is for 10 months only and is expected to escalate as the untangling continues. The company has already noted the forensic investigation concluded in March was only the first phase.

Steinhoff says in its report it had to appoint lawyers in the UK, Austria, Germany and SA.

As part of its debt restricting process, it also undertook to pay the advisory fees – including legal fees – of its creditors.

The group is facing several court cases. Steinhoff’s auditing fees also increased by 400% to €16m in 2018. This is attributed to the ‘Steinhoff events’ and the ‘extent of external auditing services required’.

Full Netwerk24 report (subscription needed)