Signa company balance sheets: Financial expert Schmolcke reveals - What is behind the late published financial statements?

Signa company balance sheets: Financial expert Schmolcke reveals - What is behind the late published financial statements?

According to a report from www.abendzeitung-muenchen.de,

Consolidated financial statements of companies are an important tool for assessing the financial situation of a company. They show how good or bad a company is doing. However, the balance sheets of Signa Holding GmbH and Signa Prime Selection AG raise some questions. The publication of their financial statements took up to five years after the reporting date, which is significantly different compared to a standard of two months for DAX companies.

Nikolaj Schmolcke, an expert in financial statements, points out that companies that publish financial statements very late may have something to hide. The behavior of the Signa companies reminds him of the behavior of P&R Container, which also published its balance sheets very late and was later exposed as a fraudulent company.

Schmolcke reads from Signa's financial statements that Prime Selection made high profits by valuing its real estate holdings according to the International Financial Reporting Standards (IFRS). This led to an appreciation of real estate by one billion euros in 2021. René Benko, the head of the Signa Group, also took major risks by carrying a large part of his loan volume with variable interest rates. According to Schmolcke, this behavior is similar to a “casino”.

In 2022, Prime Selection AG had a shortfall in current assets compared to current liabilities of 2.7 billion euros, which still did not stop it from paying out a dividend of 225 million euros. This action may not be illegal, but it clearly shows that the Signa Group is pursuing risky strategies.

The impact of these strategies could have far-reaching consequences for the real estate market and the industry as a whole. Unhealthy financial behavior could lead to a loss of trust among investors and creditors. Furthermore, it could cause René Benko's real estate empire in Munich to falter and even lead to bankruptcy.

It remains to be seen how the situation will develop and whether the Signa Group can maintain its risky strategies in the long term.