Leoni (LEOGN), a provider of cables and cable systems to the automotive sector and other industries, said that it lowered its EBIT forecast for fiscal 2016 to 65 million euros from the prior outlook of 105 million euros.
The company will nevertheless forge ahead as planned with its operating business: the sales forecast for the 2016 financial year is unchanged at 4.4 billion euros. Earnings will also, from a purely operating perspective, be on target.
As announced on 16 August 2016, Leoni AG incurred a loss amounting to about 40 million euros due to a case of fraud. The Company continues to work hard on clearing up the incident and is looking into any entitlement to claim damages in order to compensate for the financial loss.
Based on current states, final resolution on any entitlement to damages is an unrealistic prospect for 2016. The Management Board therefore concluded during its meeting today that the fraud will weigh in full on the earnings before interest and taxes (EBIT) of the third quarter and the year as a whole.
The Management Board will adhere to its existing dividend policy of paying out about one third of consolidated net income - for fiscal 2016, taking into account the exceptional cost of the fraud case, which, as it stands right now, will not be tax deductible.
In August 2016, Leoni said that it realised on 12 August 2016 that it had become the victim of fraudulent activity with the help of falsified documents and identities and the use of electronic communication channels. As a result, company funds were transferred to accounts abroad.
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