Auditors highlight 'material uncertainty' over Alam Maritim's FY17 financials

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KUALA LUMPUR (May 4): Alam Maritim Resources Bhd said its auditors Messrs Ernst & Young have highlighted a material uncertainty in respect of the group's financial statements for the financial year 2017 (FY17) that may jeopardise the group's ability to continue as a going concern.

The material uncertainty arises from, among others, the group and the company incurring a loss for the year of RM145.38 million and RM1.97 million respectively.

This, Alam Maritim said in a Bursa Malaysia filing today, was stated in an emphasis of matter in its independent auditors' report on the group's financial statements for FY17 ended Dec 31, 2017.

The auditors also highlighted two key audit matters, namely an impairment of the group's vessels and equipment, and the impairment of investment in associates and joint ventures which were affected by the subdued conditions in the oil and gas (O&G) industry.

"As at Dec 31, 2017, the group has RM391.08 million of property, vessels and equipment of which 95% relates to vessels and equipment with a total carrying value of RM371.31 million, being the most significant assets of the group.

"Due to the continued depressed O&G industry, the group has recorded a decline in revenue for the current financial year, thereby indicating that the carrying amount of the vessels and equipment may be impaired," said the auditors.

They said the current conditions of the O&G industry may also result in impairment of the group's investments in associates and joint ventures, which stood at RM39.01 million and RM149.09 million respectively.

Meanwhile, the group said the balance sheet of the group remains at a healthy level, as net assets against share capital stood at 150%.

"For FY18, the group will focus on securing contracts and will continue to exercise due care in managing and implementing strategies for the group's business and will ensure that shareholders' values are strategically enhanced from time to time," said Alam Maritim.

Alam Maritim shares fell 0.5 sen to close at 13 sen, giving a market capitalisation of RM120.18 million.