KUALA LUMPUR (July 31): The independent auditors of Scomi Group Bhd have highlighted a material uncertainty related to the going concern of the group, in an emphasis of a matter paragraph of the audit report for the group's financial year ended March 31, 2018 (FY18).

In the paragraph, the auditors at KPMG PLT noted Scomi Group, alongside its subsidiaries, have incurred net losses of about RM332.1 million for FY18, while its net current assets stood at RM80 million.

The auditors also highlighted several project disputes and problems faced by the group — among which is its ongoing legal battle with Prasarana Malaysia Bhd over the RM494 million monorail expansion project.

KPMG PLT also noted that the group had encountered difficulties in meeting statutory payments to authorities during FY18, and had delayed payments to its employees and creditors for services received.

These events and conditions "indicate that a material uncertainty exists that may cast significant doubt on the ability of the group and of the company to continue as going concerns", the auditors said.

In response, Scomi Group said the auditors have expressed unqualified opinion on the financial statements of the group and that their opinion is not modified in respect of the statement on that matter.

The group also said it has started the process of addressing key issues highlighted by the auditors, which include the pursuit of all avenues available to recover the claims in relation to the project with Prasarana. 

The group also intends to pursue various fundraising exercises over the next 12 months to improve its working capital.

In addition, Scomi said it is still in the process of negotiating the repayment plan terms with the significant project lender in relation to Line 17 project awarded by the Metro Company of Sao Paulo, and will endeavour to conclude it over the next three months. 

"With the realisation of the above, the company’s financial position is expected to improve and address the going concern issue. The Company will continue to focus on cost optimisation programmes and continuous product improvements and developments to remain competitive in each sector it is involved in," Scomi Group added.

Scomi shares closed down 4.5% today to 10.5 sen, for a market capitalisation of RM100.8 million.