Sinch sees Q2 earnings hit as one-off, rejects short-seller's criticism
12/07/2022 17:24
By Marie Mannes and Izabela Niemiec
July 12 (Reuters) - Swedish cloud communication services
provider Sinch AB SINCH.ST said on Tuesday it expected no
further adjustments after reporting a hit to its second-quarter
earnings from a cost reassessment and denied a short-seller's
report that it had overstated its 2021 revenues. urn:newsml:reuters.com:*:nL8N2YT38E
Sinch shares tumbled as much as 28% on Monday after
short-seller Ningi Research accused it of incorrectly
classifying invoices that have not yet been billed as revenue,
and overstating the performance of some operations. urn:newsml:reuters.com:*:nL8N2YS372
The company later interrupted its silent period ahead of
quarterly earnings to say that a reassessment of historical cost
of goods sold would affect its core earnings (EBITDA) by 162
million Swedish crowns ($15 million) in the quarter. At the same
time Sinch said it "strongly opposed" Ningi's claim that it had
overstated its 2021 revenues.
Sinch, which reported first-quarter core earnings of 760
Swedish crowns, acknowledged during a conference call with
analysts accounting glitches, but dismissed again the short
seller's claim about overstated revenues. It also said it saw no
need for further reassessment of its financials after one that
resulted in the adjustment to second-quarter earnings.
Sinch shares, which fell further 25% ahead of the call, were
down 12% in late Tuesday trade.
"Taking into consideration that the company currently is in
a quiet period, I feel that they gave sound responses to a lot
of the issues which needed to be answered," said Axel Karlsson,
active trading manager at Nordnet.
($1 = 10.5648 Swedish crowns)
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BREAKINGVIEWS-Sinch swats aside short-seller a little too easily
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(Reporting by Marie Mannes and Izabela Niemiec in Gdansk;
editing by Milla Nissi and Tomasz Janowski)
((Marie.mannes@thomsonreuters.com))