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Wirecard lifts 2019 guidance after strong Q1

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German payments company Wirecard raised its outlook for 2019 on Wednesday, as it sought to shake off allegations of fraud and false accounting to post a 40.7 per cent increase in core profits in the first quarter.

[FRANKFURT] German payments company Wirecard raised its outlook for 2019 on Wednesday, as it sought to shake off allegations of fraud and false accounting to post a 40.7 per cent increase in core profits in the first quarter.

Wirecard now expects earnings before interest, taxation, depreciation and amortization (EBITDA) to reach between 760 million euros and 810 million euros (S$1.16-$1.24 billion) this year, up from an earlier 740-800 million euros.

The results came two weeks after Wirecard published full-year 2018 accounts, which were delayed by allegations of fraud and false accounting at its office in Singapore in a series of reports by the Financial Times.

Wirecard won a 'clean' opinion from auditor EY for its annual results. Still, it said it would tighten up on compliance after an investigation by its law firm found local staff may have committed crimes but absolved head office staff in Munich.

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Despite the negative reporting, which wiped as much as US$10 billion off its market capitalisation, Wirecardsaid that transaction volumes processed through its platform rose by 37.4 per cent to 36.7 billion euros during the first quarter.

Wirecard, which operates both as an acquirer, processing payments on behalf of 293,000 merchants, and as an issuer of real and 'virtual' payment cards, sees plenty of runway ahead as payments become increasingly digital.

"The convergence of digital payment with innovative value-added services in the field of financial services and data-driven services on one platform will drive the formation of one of the world's largest growth markets," said CEO Markus Braun.

Mr Braun recently won the backing of a heavyweight investor in the form of Japan's Softbank, which will buy a 900 million euro five-year bond convertible into a 5.6 per cent stake in the company.

Softbank will also help Wirecard expand in Japan and South Korea, and provide opportunities to work with other companies in its portfolio in data analytics, artificial intelligence and digital financial services. 

REUTERS