(Bloomberg) — Wirecard AG , the German payments processor struggling to move on from allegations about questionable accounting methods, posted full-year revenue that beat analysts’ estimates while legal fees and audit expenses weighed on profit.
The company reported preliminary full-year revenue that rose about 38% to 2.8 billion euros ($3 billion), versus analyst projections of 2.7 billion euros, it said in a statement Friday.
Earnings before interest, tax, depreciation and amortization were 785 million euros last year. Excluding expenses for audit, advisory and legal services in the fourth quarter, ebitda was 794 million euros. That compared to an estimate of 792.3 million euros, according to the average of analysts in a Bloomberg survey. The company will publish audited figures on April 8.
Wirecard’s shares were whipsawed last year after a Financial Times report raised allegations about its accounting methods. The company’s rejected the charges and, in an attempt to assuage rattled investors, in October gave auditors at KPMG unrestricted access to its books.
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“Given the ongoing high customer growth in 2019 as well as the structural drivers such as the shift to cashless payments and steadily growing e-commerce, growth should remain dynamic in 2020,” analysts from Hauck & Aufhaeuser said in a note to clients on Friday.
Shares fell about 1% to 142.50 euros at 10:56 a.m. in Frankfurt. The stock has gained 32% this year.
Wirecard also confirmed its 2020 outlook.
Wirecard’s revenue soared in 2018 after it bought more than 15 companies in a few years. But in a series of articles last year, the Financial Times reported allegations of accounting fraud at Wirecard in Singapore and other Asian countries. The company hired law firm Rajah & Tann to investigate. A final report from the firm in March 2019 acknowledged accounting oversights and potential criminal liability among some Singapore staff, but didn’t find evidence of criminal activity linked to Wirecard’s German headquarters.
The FT then reported in October that payments processed by a Dubai-based partner company in 2016 and 2017 may not have taken place. Wirecard called those allegations “total nonsense,” but controversy has continued to dog the company, a member of Germany’s benchmark DAX index.
Wulf Matthias resigned as chairman of the supervisory board in January and was replaced by Thomas Eichelmann — head of the body’s audit committee.
Why Germany’s Wirecard Is No Stranger to Controversy: QuickTake
“This is a strong result on our path for profitable growth,” Chief Executive Officer Markus Braun said. “Above all, it is very clear evidence of the sustained profitability of our business model.”
(Updates with analyst comment in fifth paragraph, CEO comment in final paragraph. A previous version of this story corrected the period for adjusted Ebitda.)
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