Friday 24 May 2024
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KUALA LUMPUR (Feb 14): PLB Engineering Bhd's external auditor flagged a material uncertainty that could cast significant doubt on its ability to continue as a going concern.

The auditor, Messrs Grant Thornton Malaysia PLT, highlighted PLB Engineering’s net loss of RM27.97 million for the financial year ending August 31, 2023 (FY2023), with negative cash flows from operating activities at both the group level (amounting to RM14.79 million) and company level (RM3.81 million).

The Penang-based construction and property development outfit, which had executed construction works for clients such as the Employees Provident Fund (EPF) and Permodalan Nasional Bhd (PNB), also saw its current liabilities exceed current assets by RM82.36 million, the auditor added.

Grant Thornton noted that these conditions, suggesting material uncertainties and raising doubts about the group’s ability to continue, hinge on its reliance on successful asset sales, completion of ongoing projects and maintaining continuous financial support from bankers.

In response, PLB Engineering said it has secured new construction projects valued at RM44.64 million in FY2023.

“The current on-going external construction projects which is located at Simpang Ampat-Seberang Perai Tengah, Penang Island and Padang Meha-Kulim Kedah is expected to contribute to the group turnover with unbilled sales of RM32.65 million over the year,” it said.

PLB Engineering also reached 30% physical completion and 69% sales for its housing project "The Dew”, contributing to unbilled sales of RM59.95 million, it added.

The group is also actively seeking land buyers to enhance its financial position, participating in project tenders, managing costs and closely monitoring progress.

"The directors believe that with the improving outlook of the property market and continued support from the bankers, the group is able to generate sufficient cash flows from the operations to meet the obligations and working capital of the group," it added.

Barring unforeseen circumstances, PLB Engineering expects to address these concerns in the next financial year.

In the last seven financial years, PLB had booked losses in FY2018, FY2020, FY2022, and FY2023.

As at end-November last year, it had retained losses of RM19.32 million. Cash and bank balances stood at RM10.02 million, against short-term borrowings of RM107.91 million and long-term borrowings of RM125.11 million.

At its current balance sheet position, the group had a net gearing level of 2.8 times.

Aside from property development, PLB Engineering also operates in other segments like renewable energy, construction and property letting.

PLB Engineering executive chairman Datuk Seri Ong Choo Hoon is the group's single largest shareholder, with a 5.58% direct stake and a 60.87% indirect stake through his family's private investment vehicle, Leading Builders Sdn Bhd.

PLB Engineering's completed projects include the construction of a 12-storey office in Daerah Seberang Prai Tengah for the EPF, and a 27-storey office on Jalan Raja Laut, Kuala Lumpur, for PNB.

On February 21, 2020, PLB Engineering signed a conditional Joint Development Agreement (JDA) with the Penang state government and its development arm, Penang Development Corp, to undertake rehabilitation works for the Jelutong dumpsite along Lebuhraya Tun Dr Lim Chong Eu in Penang, in exchange for three-fourths of the rehabilitated land.

PLB Engineering's shares traded 2.86% higher to RM1.08 on Wednesday, giving the group a market capitalisation of RM121.39 million.

Edited ByAdam Aziz
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