Friday , December 4 2020

Kraft Heinz grows almost 20% in the stock market and Warren Buffett loses US $ 2,800 million



The group took advantage of yesterday to present its accounts for the last quarter of the year to admit that the SEC was initiating an investigation into its "accounting practices, procedures and internal controls" in October.

The shares of Kraft Heinz have dropped 20.5% in the bargain after Wall Street after the company announced that the SEC (US securities regulator) had opened an inquiry into accounting habits.

The group took advantage of yesterday to present its accounts for the last quarter of the year to admit that the SEC was initiating an investigation into its "accounting practices, procedures and internal controls" in October.

The decision of the regulator gave endaches to disastrous consequences. Kraft Heinz has lost US $ 12,608 million in the last quarter of 2018 after the breakdown of goodwill by US $ 15,400 million to update the value of specific business units in the United States and Canada and some intangible assets, including the Kraft and Oscar Mayer brands .

Anticipated operating amortization (EBITDA) operating income has dropped by 13.9% to US $ 1,700 million, with the effect of exchange rates, while sales fell by 1.1% to US $ 6,891 million, far from US $ 6,940 million expected of the market.

In addition, the company announced a dividend cut of up to US $ 0.40 per quarter (US $ 1.60 per year), a figure representing a 36% reduction in pay.

"Profitability has reduced our expectations due to a combination of unexpected cost inflation and lower savings than expected," said the company's CEO, Bernardo Hees.

As if this were not enough, the forecast for the group for 2019 has not convinced the market either. Kraft Heinz expects the EBITDA to close this year between US $ 6,300 and US $ 6,500 million, well below US $ 7,470 million foreseen by Wall Street.

Kraft Heinz is the largest food group in the world, which comes from joining Kraft and Heinz in 2015, an operation promoted by Warren Buffett through Berkshire Hathaway (first shareholder with 27% of capital) , and with the support of the 3G capital company, which catches the group's brain.

With this move in the stock market, Berkshire dropped his capitalization at Kraft from US $ 15.7 billion to US $ 12.9 billion.


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