NINGI Research is short Sinch AB (Ticker: SINCH.ST) because, in our opinion, the company acquired nocuous assets and misstated its accounts to beat analysts’ estimates and pump its share price. We have found material misstatements within the company’s reporting, and think past interim reports and the 2021 annual report do not present an accurate or fairly picture of the financial position of Sinch AB. We think Sinch restated financials for its own benefit and fabricated its adjusted EBITDA to avoid a covenant breach of its 2019 senior unsecured bond retrospectively. Likewise, we question Deloitte’s unqualified opinion for the 2021 annual report and if the company complied with its bond covenants in the past.
- In a published response to our report, the company labeled all misstatements as errors and rejects our findings as well as an independent audit to date.
- Sinch engaged in investor dialogues despite rejecting other investor inquiries with reference to the silent period
- The company restated its ECL balance, but misstated it by not including a reported adjustment for SDI
- Sinch restated its Note 22 and the earnouts, so they do not have to do an incurrence test retrospectively
- Sinch adjusted its EBITDA in an obscure way to meet the threshold required by its bond covenants
- We think the threshold of 3.25x net debt / pro forma EBITDA has already been breached in Q4/2021, and we calculated a net debt / pro forma EBITDA of about 3.4x, vs. the published 2.9x by Sinch
- In our opinion an email box, which is routed to the company’s General Counsel is not a whistleblower hotline
- We still question the unqualified opinion for the 2021 annual report and question the reporting for all interim reports.
- Likewise, we question if Sinch has complied with any bond covenants.