Kraft Heinz moved a step closer to resolving problems with its accounting as it said an internal investigation did not identify any misconduct by the senior management team. An investigation by the Securities and Exchange Commission continues, however.
The company behind Heinz ketchup and Philadelphia cream cheese disclosed last month that it would restate three years of results after an internal probe uncovered serious accounting problems.
The investigation, launched after Kraft Heinz received a subpoena from the SEC, found evidence of misconduct in its procurement operations, the company said last month. The company had improperly accounted for arrangements with suppliers, which it described as “complex”. In particular, there were problems in how it had recognised costs and rebates.
The internal probe revealed the cost of products sold were understated by $208m over a period of four years but the misstatements were not material. “The cumulative impact of the restatements to previously reported amounts from 2015 to 2018 is less than 1 per cent of net income . . . for each applicable period,” the company said.
Kraft Heinz now expects to report its quarterly results on or before July 31.
The Warren Buffett-backed company said it is “taking actions to improve internal policies and procedures and to strengthen internal control over financial reporting”.
“We are pleased that Kraft Heinz is returning to a path of normalisation,” said Alex Behring, chairman.
In addition to procurement, the SEC is also examining a $15bn writedown that Kraft Heinz took in February.
Kraft Heinz shares, which are down more than 33 per cent so far this year, rose 2.1 per cent to $29.34 in after-hours trade on Friday.
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