PLB Engineering's external auditor raises concern over company's ability to stay afloat

NST Wed, Feb 14, 2024 10:36pm - 2 months View Original

KUALA LUMPUR:  PLB Engineering Bhd's external auditor has raised concern over the company's ability to stay afloat based on its audited financial statement for the financial year ended Aug 31, 2023.

Its external auditor, Messrs Grant Thornton Malaysia PLT cited losses, liabilities that far exceed assets and negative cashflows at group and company levels, as key issues which will hamper its ability to operate as a going concern.

The group and the company incurred a net loss of RM27.97 million and RM18.43 million respectively for the financial year ended Aug 31, 2023 and, as of that date, the group's and the company's current liabilities exceeded their current assets by RM82.36 million and RM25.42 milion respectively.

The group and the company also recorded negative cash flows from operating activities of RM14.793 million and RM3.81 million respectively for the financial year ended Aug 31, 2023.

The external auditor said that the group's ability to operate as a going concern is dependent on the successful sales of its assets, completion of its on-going construction projects and continuous financial support from its bankers.

However, its opinion is not modified in respect of the matter.

PLB Engineering's board of directors  believe however that with the improving outlook of property market and continued support from the bankers, the group is able to generate sufficient cash flows from the operations to meet the obligations and working capital of the group.

The group has been awarded new external construction projects which amounts to RM44.64 million during Aug 31, 2023.

The current on-going external construction projects which is located at Simpang Ampat-Seberang Perai Tengah, Penang Island and Padang Meha-Kulim Kedah is also expected to contribute to the group turnover with the unbilled sales of RM32.65 million over the year.

The group's property development sector continued to record encouraging performance for the affordable housing schemes in Paya Terubong, with 30 per cent physical completion and 69 per cent of sales with sale and purchase agreement signed at unbilled sales of RM59.95 million todate.

The group is also actively seeking land buyers to enhance its financial position, participating in project tenders, managing costs and closely monitoring progress.

Barring unforeseen circumstances, PLB Engineering expects to address its external auditors' concerns in the next financial year.

PLB Engineering's share price closed 2.86 per cent higher to RM1.08, giving it a market capitalisation of RM121.39 million.

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