KUALA LUMPUR (July 31): Avillion Bhd said its auditor has raised concerns about the loss-making property and hospitality group’s ability to continue operating as a going concern in its audited financial statements for the financial year ended March 31, 2023 (FY2023).

According to its filing on Monday (July 31), its external auditor Messrs Baker Tilly Monteiro Heng PLT said Avillion incurred net losses of RM5.4 million at the group level and RM4.84 million at the company level in FY2023, although the group’s hospitality, property, and travel divisions have recovered after the Covid-19 pandemic.

“[This] thereby indicates the existence of a material uncertainty which may cast significant doubt about the group’s and the company’s ability to continue as a going concern,” it said.

Meanwhile, Avillion said it has implemented certain measures to weather through the challenging time, including continuing to roll out its innovative and attractive packages to further improve the occupancy and revenue of the hotel division, disposal of low or non-yielding land bank, intensifying sales and marketing efforts to sell the remaining units from the current development project and completed properties as well as continuous financial support from the bankers.

Avillion’s revenue jumped 108% to RM66.7 million in FY2023 from RM32.1 million in the previous year, while its losses before tax narrowed to RM5.3 million from RM10.8 million during the same period.

“The directors of the company are of the opinion that the presentation of the group’s financial statements on a going concern basis remains appropriate as they believe the group’s business operations are gradually returning to pre-pandemic levels by the reopening of Malaysia’s international border for travellers, and accordingly, the company can realise its assets and discharge its liabilities in the normal course of business," it added.

Barring any unforeseen circumstances, the group expects to resolve the matter in the subsequent financial year.

Avillion’s shares closed unchanged at six sen on Monday, valuing the group at RM68 million. The stock has fallen 25% year to date.