In another potential case of “upps, calculations don’t appear to have been quite right”, auditors PwC today have “considered” that the €493.1 million first semester losses posted earlier this week by TAP are “under-evaluated” – because €893 million that TAP SA is waiting to receive from TAP SGPS, and which haven’t yet arrived, have been ‘taken into account’
Only yesterday statistics institute INE published new data to show Portugal had fudged its sums over the fall in the economy – to the point that we are now in the greatest recession since 1928 (although records only began in 1995, so technically it is “the greatest recession since 1995…”). Now this: TAP’s gargantuan losses even greater at a time when the airline’s restructuring plan remains ‘on hold’ due to doubts that it can really be justified (click here).
Said the international audit giant: “We consider the item ‘other accounts receivable’ to be overvalued – and the negative net result undervalued by an amount that, in the current circumstances, it is not possible for us to quantify with a reasonable degree of certainty, given the inherent uncertainty with the restructuring plan”.
With the brouhaha of electioneering still taking up politicians’ time – not to mention media spotlight – this is just another burning issue for the weeks to come.
It wasn’t long ago that Ryanair’s president Michael O’Leary was lambasting TAP for gobbling up taxpayers’ money with nothing to show for it (click here) and “blocking Portugal’s recovery from the pandemic” (click here).
PwC’s report seems to be saying much the same, in much less inflammatory language.
Says Lusa, the auditor recognises that operations of TAP group are dependent on approval of the restructuring plan by the European Commission, “on the ability to obtain shareholder financial support and/ or external financial resources” and on the evolution of the Covid-19 and the pandemic recovery of the aviation sector.
Bearing all this in mind “the factors described above represent a material uncertainty that may cast doubt on the group’s ability to maintain continuity of its operations”.
As this new information ‘settles’, Expresso has let another apparent ‘oversight’ drop: TAP has sold €657 million in tickets for flights that haven’t yet taken off… “The value of tickets sold increased in 2021 and a significant part of these were for flights that were cancelled and will have to be undertaken”.