KUALA LUMPUR (Oct 30): Practice Note 17 (PN17) company Barakah Offshore Petroleum Bhd's independent auditor has issued a disclaimer of opinion on the group's application of the "going concern" assumption in preparing its financial statements for the fiscal year ended June 30, 2023 (FY2023) despite incurring a net loss of RM4 million for the year.

In a bourse filing on Monday, Barakah said auditor HLB Ler Lum Chew PLT also noted that the group’s current liabilities exceed its current assets by RM18.21 million, and that it had a deficit of shareholders’ funds of RM15.05 million.

This indicates "the existence of a material uncertainty, which may cast significant doubt about the group’s ability to continue as a going concern", the auditor was quoted as saying.

According to Barakah's latest annual report, its total borrowings increased to RM52 million, from RM49 million in FY2022, due to fluctuations in foreign exchange rates, as the group’s borrowings are mainly in US dollars.

In its filing, Barakah outlined several measures implemented by the group to address the going concern matters, including proactively exploring business opportunities with non-oil and gas customers and oil and gas customers.

It noted that the group in July secured contract amendment and contract extension from its existing customers for the provision of the Pan Malaysia maintenance, construction and modification contracts for 2018 to 2023 Package A (West Malaysia). The contracts, which expired in July, had been extended to December 2024.

Barakah also noted that in August, the group received a letter of award from Brunei Shell Petroleum Co Sdn Bhd for the supply of engineering work, materials, fabrication, load-out, decommission, installation and commissioning of one unit of a single-point mooring buoy at the shoreline of Brunei Darussalam.

It also pointed out that the licence suspension imposed against its wholly-owned subsidiary PBJV Group Sdn Bhd since July 2019 was lifted by Petroliam Nasional Bhd (Petronas) on April 6, 2023.

Barakah said it expects to resolve the issues relating to the material uncertainty related to the going concern in the subsequent financial year.

Shares in Barakah Offshore ended 1.5 sen or 27.27% lower at four sen on Monday, giving the group a market capitalisation of RM36.77 million.