I had a look at the AFS 2019. At first it looks horrible, Equity at negative 2.4 Billion € and a loss of 1.84 billion €.
However looking into it one can see what an impressive job the management has done to keep this ship sailing into the right direction. Even though management has performed exceptionally well during the period their remuneration went down from 45 Million to 29 Million €.
Now to the key highlights after the reporting period:
-Sold Blue Group for 10 Million
-Sold part of Greenlit for 40 Million €
- Disposal of Unitrans of 300 Million €
- Sale of Sherwood of 50 Million €
- Properties disposed of 280 Million €
All these proceeds are not reflected in the cash balance yet. 680 Million Additional cash.
Now looking at the operational performance:
Revenue grew to 12 billion € from continued operations.
Loss however came in at 1.84 billion €. This looks terrible at the first look. BUT we have to take the following into consideration:
Once off Advisory Fees: 160 Million
Interest expense 1.1 billion (Which is capitalized at the moment and will hopefully be refinanced at way lower interest rates after 2021)
Loss from discontinued operations 450 Million (These units will be gone in the near future)
Impairments of: 400 Million (Additional once off impairments have occurred) hopefully the last ones as there is basically nothing left to write down)
Conforama restructure charges 217 Million once off.
Amortization/Depreciation charges of around 200 Million.
This actually gives you a profit of around 0.9 to 1 billion.
Net stores increased by 550 stores
MF is valued at 9 Million € in the books, MF is worth way more after the restructure.
Net debt levels
Current: 9.6 billion
This includes a 180 Million take up of MF loans 180 Million MF.
The actual debt should have been at 9.1 billion opening balance plus the 1.1 billion interest. So we would be sitting at 10.2 billion plus the 180 Million take up of MF. This gives us around 10.4 billion.
But guys have you noticed that the Actual balance sits at 9.6 Billion € as at 30.9.2019.
Which means that Steinhoff has reduced the loans by around 0.8 Billion €.
We are on a good way guys. I think management is still following a very conservative approach and they use every opportunity to account for values at the lowest possible value. Again I think this is to act poor for the litigation's to come.
Also litigation seem to be ongoing. Luckily no provisions have been raised yet which means no claims are certain as of today. If a claim would have been probable they would need to immediately record a provision.
Also regarding the audit opinion:
We had the following number of points which formed the basis of disclaimer of opinion:
2017: 9 points
2018: 8 points
2019: Only 6 points left.
Material uncertainty related to going concern – This one will disappear once litigation are sorted or more long term loans are secured.
Material uncertainty with respect to litigation- Relates to point 1
Material uncertainty with respect to uncertain tax positions – Might be solved for 2020
Material uncertainty with respect to the share in the investment in Conforama - Might be solved for 2020
Material uncertainty with respect to the audit evidence of Conforama - Might be solved for 2020
Material uncertainty with respect to the foreign currency translation reserve - Might be solved for 2020
Again this is just my personal own opinion of the AFS 2019. Looking forward to the HJ 2020 results as we will then be up to date also with the reporting timelines.