Wirecard Boosts Profit Forecast After Payment Growth Jumps
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 euros ($908 million) is good news for Chief Executive Officer Markus Braun, who has battled the allegations since January. Wirecard shares rose 2.7 percent at 9:08 a.m. in Frankfurt.
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 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 license 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.
After months of whipsawing shares 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 percent stake backed by convertible bonds. The stock is about 18 percent below the level prior to the initial FT reports.
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