Subur Tiasa drops up to 5% after liabilities exceed current assets

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KUALA LUMPUR (April 26): Shares of Subur Tiasa Holdings Bhd fell 12 sen or 4.96% to an intraday low of RM2.30 after independent auditor Crowe Group Malaysia PLT issued an opinion of unmodified audit with material uncertainty related to changes concern regarding the audited financial statements for the year ended December 31, 2021 (FP21).

At the closing bell on Tuesday, April 26, the meter pared some losses to settle at RM2.34, still down eight sen or 3.31% from Monday’s close. At RM2.34, Subur Tiasa is valued at RM489.06 million.

Since the start of the year, the stock has jumped 112.7%.

Subur Tiasa said in a stock exchange filing on Monday that Crowe Malaysia drew attention to Note 5 in its financial statements, which stated that as of December 31, 2021, the group’s current liabilities exceeded its current assets by 393.8 million (2020: RM458.3 million).

According to Crowe Malaysia, this condition has raised concerns about whether the group has sufficient cash flow to meet its obligations for the next 12 months from the end of the reporting period, and whether the use of the going concern basis in the preparation of the financial statements was appropriate.

This despite a net profit of RM73 million (2020: a net loss of RM25.6 million) and net operating cash inflows of RM172.5 million (2020: RM46.8 million) recorded by the group for the financial period.

“In assessing the appropriateness of the financial statements prepared on a going concern basis, management has considered the group’s cash flow forecasts for the year ended 31 December 2022 taking into account the factors listed in note 5 of the financial statements.

“Barring unforeseen circumstances, management reasonably expects the group to generate sufficient cash flow over the next 12 months to enable it to meet its obligations as they arise. Accordingly, the Group financial statements have been prepared on a going concern basis. Our opinion is not modified in respect of this matter,” said Crowe Malaysia.

On his part, Subur Tiasa said he firmly believes that the group’s business is still relevant with the positive market outlook for its plantation segment.

“Management is confident that the group will be able to improve its operating results and profitability, and generate sufficient cash flow for the year ended December 31, 2022,” he said.

According to the group, despite the Covid-19 outbreak, it recorded an after-tax profit turnaround of RM73 million for FP21 from the net loss of RM25.6 million in FY2020 (FY20). ).

It said it generated net operating cash inflow of RM172.5 million and recorded earnings before interest, tax, depreciation and amortization of RM207.5 million for FP21 from FY20 to RM46.8 million and RM54.2 million respectively.

The group also said it had focused on its operations in the oil palm plantation segment – ​​the catalyst for the recovery trajectory.

It added that it has started streamlining its timber segment since mid-2020 and has successfully implemented various cost streamlining measures in terms of optimizing its resources and reshuffling its workforce. , resulting in significant operational efficiencies and cost savings.

“The group was able to service all of its liabilities during the year and these financial facilities which are subject to periodic reviews have been renewed consistently,” he said.

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