KUALA LUMPUR (April 8): Subur Tiasa Holdings Bhd's (KL:SUBUR) audited financial statements for the financial year ended Dec 31, 2024 (FY2024) has been flagged with a material uncertainty by its independent auditor, casting doubt over the timber firm's ability to continue as a going concern.

This is the fourth consecutive year Subur Tiasa’s accounts have been flagged with a material uncertainty related to a going concern — it was hit with similar unmodified audit opinions for FY2023, FY2022 and FY2021. 

On Subur Tiasa’s audited accounts for FY2024, Messrs Crowe Malaysia PLT highlighted that the group’s current liabilities exceed assets by RM393 million.

“This condition gives rise to concern about whether the group has sufficient cash flows to meet its obligations for the next 12 months from the end of the reporting period, and whether the use of going concern basis in the preparation of the financial statements is appropriate,” Crowe Malaysia PLT said.

However, Subur Tiasa’s management expects cash flow generation to be sufficient to fulfil its obligations for 2025. “Accordingly, the financial statements of the group have been prepared on the going concern basis. Our opinion is not modified in respect of this matter,” the auditor noted.

Towards rationalising its operations, Subur Tiasa has moved to strengthen its plantation segment while offloading non-productive timber assets.

As at end-2024, the group owned 23,505 in total planted area. It disposed of RM23.2 million worth of idle assets that year.

In terms of earnings, Subur Tiasa returned to the black in FY2024 with a net profit of RM3.21 million versus a net loss of RM15.71 million a year earlier, while revenue declined 7.3% to RM430.78 million from RM464.84 million.

“This recovery was further supported by robust net operating cash inflows of RM74.4 million, driven by a 10% increase in average crude palm oil (CPO) prices,” the group said.

Subur Tiasa noted it consistently fulfilled all debt obligations in FY2024. The group had total borrowings of RM600.81 million at the end of last year.

“Management remains confident in the group’s ability to deliver improved operational performance and profitability, supported by steady cash flow generation for FY2025,” it added.

Shares in Subur Tiasa ended 1.5 sen or 2.25% lower at 65.5 sen, valuing the company at RM136.89 million. The counter is down 16% this year.