PETALING JAYA: Rimbunan Sawit Bhd’s auditor Messrs Crowe Malaysia PLT has raised a material uncertainty related to the group’s going concern, casting significant doubt on its ability to continue.
The going concern, which refers to the company’s ability to stay afloat, was related to the company’s liabilities which exceeded current assets by RM225.4 million, and a net loss of RM5.8 million for the financial year ended Dec 31, 2022 (FY2022).
In a bourse filing yesterday, Crowe said “These conditions and the tax dispute with the Inland Revenue Board as disclosed in Note 34 to the financial statements, indicate that a material uncertainty exists”.
Despite the statement, Crowe expressed that the group’s financial statements provided a true and fair view of its FY2022 financial position, performance, and cash flow.
As at Dec 31, 2022, the group’s total borrowings amounted to RM349.4 million, of which RM190.5 million were classified as current liabilities.
In spite of the loss suffered, Rimbunan managed to record earnings before interest, tax, depreciation and amortisation (Ebitda) of RM84.8 million in FY2022.
The audit firm added that at the end of its reporting period, the group had available approved unutilised credit facilities of RM86.3 million to meet any possible shortfall in working capital requirements.
Meanwhile, Rimbunan expressed confidence it will continue to enjoy the existing credit facilities granted by the banks as it has not defaulted on any repayment obligations for the financial year.
Furthermore, as part of its rationalisation plan, the group has taken measures to improve its cash flow position by downsizing or ceasing the operations of certain unproductive oil palm plantation estates, so as to reduce future losses and cash outflows from these estates.
Earlier this month (April 18), Rimbunan announced the voluntary winding up of its wholly owned subsidiary Rajang Agrisupplies Sdn Bhd.
The group said barring any other unforeseen circumstances, it will be able to generate sufficient cash flow to meet its obligations and working capital needs for the next financial year.
At press time, Rimbunan’s share price fell 0.5 sen or 3.33% to 14.5 sen, valuing the company at RM286.8 million.