KUALA LUMPUR (Dec 20): PLB Engineering Bhd’s (KL:PLB) external auditors, Grant Thornton Malaysia PLT, have expressed an unmodified audit opinion with material uncertainty regarding the group's ability to continue as a going concern.

Grant Thornton highlighted the group’s and the company’s net losses of RM12.79 million and RM17.12 million, respectively, in the audited financial statements for the financial year ended Aug 31, 2024 (FY2024).

It also noted that the group’s and the company’s current liabilities exceeded their current assets by RM54.79 million and RM52.18 million, respectively.

“The continuation of the group and the company as a going concern is dependent on the successful disposal of its assets, completion of its on-going construction and property development projects and continuous financial support from its bankers. Our opinion is not modified in respect of this matter,” said the auditors.

Grant Thornton highlighted key audit matters related to PLB Engineering’s property development and construction activities, which accounted for RM70.23 million in revenue and RM43.65 million in direct costs. This segment contributed 84.71% of PLB’s total revenue for FY2024.

To address these audit concerns, PLB said in its bourse filing that the group is actively involved in project tendering to secure new opportunities, including industrial factory buildings, infrastructure works, and centralised labour quarters, complexes, aiming to generate recurring income.

Additionally, the group is focused on managing costs for ongoing projects and closely monitoring their progress to ensure timely completion within the contract period.

“During the year under review, the group focused on the on-going affordable housing schemes in Paya Terubong, The Dew, to ensure timely completion of the project. The scheme with 281 units has recorded sales with a signed sale & purchase agreement of 84% and achieved 45% completion to date,” it said.

PLB said it is actively seeking buyers for its undeveloped land banks, with plans to use the proceeds to reduce bank borrowings and payables, aiming to improve its net current liabilities position.

The group is also divesting non-core businesses to enhance its financial position and reduce its gearing levels. This includes the sale of a 60% stake in PLB Green Solar Sdn Bhd for RM19.8 million. Additionally, the group has reached a mutual agreement with Seberang Perai City Council and Penang City Council on the buyout price for the Pulau Burung project in Penang.

“Premised on the above, 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.

“Some of the steps above are in the process of being implemented with various timelines attached to them. Barring unforeseen circumstances, the board expects to address the matters as mentioned above within the next financial year,” it added.

As of end-August, PLB had RM158.23 million in bank borrowings against cash and bank balances of RM7.8 million. Trade receivables stood at RM10.88 million against trade payables of RM36.62 million.

The group’s accumulated losses stood at RM30.62 million against its share capital of RM112.4 million.

Shares of PLB closed 10 sen or 9.71% higher at RM1.13 on Friday, valuing the construction and property company at RM115.8 million. The counter has gained over 9% year-to-date.