BERLIN • Wirecard AG raised its earnings forecast for the year after first-quarter (1Q) 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 (RM3.77 billion) is good news for CEO Markus Braun, who has battled the allegations since January. Wirecard shares rose 2.7% at 9:08am in Frankfurt yesterday.
Combining 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 yesterday.
After a series of Financial Times (FT) 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 authorities in Germany and Singapore continue independent probes.
Wirecard expects 2019 earnings before interest, taxes, depreciation and amortisation (Ebitda) to climb to between €760 million and €810 million, compared to the previous range of €740 million to €800 million.
The new forecast compares to the average analyst estimate of €764 million, according to data compiled by Bloomberg.
The 1Q Ebitda jumped 41% to €158 million, while revenue increased 35% to €567 million. Transactions processed through its system climbed 37% to €36.7 billion.
Wirecard 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% stake backed by convertible bonds.
The stock is about 18% below the level prior to the initial FT reports. — Bloomberg