This article first appeared in The Edge Financial Daily on December 13, 2019

KUALA LUMPUR: Brahim’s Holdings Bhd’s external auditor PricewaterhouseCoopers PLT (PwC) has resigned on a voluntary basis with immediate effect. No reason was given for the resignation.

In a filing with Bursa Malaysia yesterday, Brahim’s said PwC were reappointed as the group’s auditor at the previous annual general meeting (AGM) on May 4, and was to hold office until the conclusion of the next AGM.

Brahim’s said it has identified Baker Tilly Monteiro Heng PLT as the new auditor for the current financial year ending Dec 31, 2019 (FY19).

On April 16, PwC made an unqualified opinion on Brahim’s FY18 financial statements, highlighting a material uncertainty related to the group’s going concern.

The auditor pointed to a note in the group’s FY18 financial statements which stated that Brahim’s had incurred a net loss after tax of RM116 million and RM59.6 million at the group and company level, while liabilities had exceeded current assets by RM56.6 million and RM80.2 million respectively.

PwC said Brahim’s also did not meet certain financial covenants for a term loan as at Dec 31, 2018, as disclosed in Note 25 of its financial statements.

It said the losses incurred by the group, coupled with the net current liabilities, indicated the existence of a material uncertainty that may cast doubt on the group’s ability to continue as a going concern and therefore may not be able to realise the assets and discharge the liabilities in the normal course of business.

Brahim’s share price gained four sen or 16% to 28.5 sen yesterday, giving it a market capitalisation of RM67.34 million.

The counter has jumped 81% in December, from just 16 sen on Nov 29.

This came after the group released its third quarter ended Sept 30, 2019 (3QFY19) financial results on Nov 29, which saw it return to profit of RM1.8 million, from a net loss of RM4.03 million a year ago. Revenue for the quarter grew 13.8% to RM80.5 million from RM70.73 million for 3QFY18.

Brahim’s disclosed that inflight catering and related revenue in the services showed increasing trends when compared to the revenue in previous corresponding quarter.

The group also said the 4QFY19 outlook for its inflight catering division is expected to be positive and grow mainly due to the improvement in flights and meal supply to airlines.

“The number of meals has shown the trend to grow for both Malaysia Airlines and foreign carriers. To manage rising cost, the management will continue cost-saving initiatives that have been implemented since previous years,” it said.