KUALA LUMPUR (Oct 31): Rubber glove manufacturer Careplus Group Bhd (KL:CAREPLS) said its external auditor, Deloitte Malaysia PLT, has issued an unqualified opinion with a material uncertainty related to the group’s ability to continue as a going concern, as disclosed in its audited financial statements for the financial year ended June 30, 2025 (FY2025).
In its report, Deloitte noted that Careplus and its subsidiaries recorded net losses of RM82.47 million for the year, while the company itself booked RM54.2 million in losses. The group also registered net operating cash outflows of RM7.27 million, and RM34.96 million at the company level.
As at end-June, its accumulated losses stood at RM16.21 million at the group level, and RM21.97 million at the company level.
Further, Deloitte said Careplus continues to operate in a challenging environment, citing the persistent global oversupply of gloves, subdued selling prices, and rising production costs.
It also noted that the group’s new energy segment faces reputational and market uncertainties following the financial distress of its principal for the Neta-branded vehicles, intense industry competition, and significant funding requirements for the new completely knocked down (CKD) assembly plant under construction.
“Notwithstanding, these conditions, management has developed plans... including securing new glove customer orders, monetising existing electric vehicle inventories, securing sufficient contracts upon the completion of the CKD plant by December 2025, restructuring project costs, undertaking fund-raising activities which may include a private placement, financial support from a director, and exploring disposal or pledge of non-core assets to raise additional financing,” Deloitte said.
“The appropriateness of the going concern assumption is dependent on the successful financial and operational restructuring and ensuring the availability of continued financial support from the Group’s lenders and director,” it added.
Deloitte also highlighted the valuation of inventories and impairment assessment of property, plant and equipment (PPE) as key audit matters.
The auditor noted that significant judgement was required to assess the net realisable value of glove inventories worth RM9.46 million, as well as electric vehicle inventories of RM19.86 million, given the competitive market and unsold units linked to the Neta brand.
It also pointed out that two subsidiaries — Careglove Global Sdn Bhd and Rubbercare Protection Products Sdn Bhd — continued to post operating losses due to the prolonged industry downturn, prompting the group to recognise an impairment loss of RM28.78 million on its PPE.
In response, Careplus said it has commenced the assembly of certain commercial vehicles from other brands at its Senawang factory and will expand its capacity to the New Energy Vehicle (NEV) Manufacturing Hub upon its completion by December 2025.
“The company is actively exploring potential collaborations with other original equipment manufacturers (OEMs) seeking to expand their presence in strategic locations,” it said.
Careplus added that it is in preliminary discussions with potential sophisticated investors for a fresh capital injection, and will make further announcements once terms are agreed upon and finalised.
Shares of Careplus closed unchanged at 9.5 sen on Friday, with a market capitalisation of RM73.14 million. Year to date, the counter has fallen more than 63%.