Kraft Heinz under investigation from SEC

The US Securities Exchange Commission is investigating Kraft Heinz's accounting practices, the US foods colossus revealed as it reported huge quarterly losses and cut its dividend.

Following a subpoena received in October, the SEC probe will focus on its “accounting policies, procedures and internal controls”. Kraft said it had also launched its own investigation and increased the cost of its products sold by $25m as a result.

“The company is in the process of implementing certain improvements to its internal controls to mitigate the likelihood of this occurring in the future and has taken other remedial measures,” it said. “The company does not expect the matters subject to the investigation to be material to its current period or any prior period financial statements.”

Kraft also announced that it took an impairment charge of $15.4bn that pushed the group’s loss to $12.6bn for the last quarter of the year. It also said it would be slashing its dividend by 36% ($1.6 per year, down from $2.5 per year)

Kraft Heinz CEO Bernardo Hees blamed operational issues, such as manufacturing and logistics costs that were higher than expected.

"We are overly optimistic on delivering savings that did not materialize by year-end," Hees said on a conference call with investors overnight. "For that, we take full responsibility. And we have taken steps to ensure this does not happen again by planning process, procedures and organization structure."

As a result the company’s shares fell in after-hours trading over 20% to just above $38.