KUALA LUMPUR (Oct 8): Lion Industries Corp Bhd (KL:LIONIND) said on Thursday its independent auditor has issued an unqualified audit opinion with a material uncertainty related to the group’s ability as a going concern.
Forvis Mazars PLT, which audited the steel and building materials group’s financial statements for the 18-month period ended June 30, 2026, noted that the group incurred a net loss of RM211 million and recorded net cash outflow from operating activities of RM10 million during the period
At the company level, Lion Industries incurred a net loss of RM117 million and recorded net cash outflow from operating activities of RM7 million. As at June 30, 2026, the company was also in a net current liabilities position of RM144 million.
An "unqualified opinion" in auditing means the financial statements are fairly and accurately presented. Even with a clean report, an auditor may point out significant uncertainties regarding the company's ability to continue as a “going concern” — meaning whether it has enough resources to stay solvent and operational.
The auditors' report, filed with Bursa Malaysia by Lion Industries, noted that the group obtained its lender’s approval to reschedule repayment of a RM33.5 million term loan and extend the facility tenure to Dec 31, 2027.
The auditor said the rescheduling would reduce the group’s near-term debt repayment obligations and provide additional time to implement its planned asset disposals, rationalisation and monetisation initiatives, as well as operational improvement measures.
However, Lion Industries’ ability to maintain adequate liquidity and meet its obligations as they fall due remains dependent on the successful implementation of these initiatives and the achievement of the anticipated benefits from its cost optimisation and operational efficiency measures, said Forvis Mazars.
The auditor also noted that neither the group nor the company had any undrawn committed banking facilities available to provide additional liquidity as at the date of approval of the financial statements.
It said the proposed asset disposals, rationalisation and monetisation initiatives were at different stages of evaluation and negotiation, and subject to definitive agreements and various commercial, regulatory, shareholder and other conditions, where applicable.
“The timing, value and outcome of these initiatives are also subject to negotiations with potential counterparties, prevailing market conditions and other factors that are not wholly within the group’s control," said Forvis Mazars.
“These events and conditions, along with the other matters disclosed in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the group’s and the company’s ability to continue as a going concern,” it added.
“Our opinion is not modified in respect of this matter.”
Lion Industries did not provide further details in the filing on how it intends to address its financial position beyond the measures outlined by the auditor.
For the 18-month period ended June 30, 2026, the group reported RM218.8 million in net loss, after accounting for RM16.6 million in losses from associated companies and a joint venture, on revenue of RM1.71 billion. The steel and building materials divisions were the group’s two main revenue contributors.
The group had RM91.1 million in cash and cash equivalents as at end-June against RM142.2 million in total borrowings.
At Thursday’s close, Lion Industries shares fell 0.5 sen or 4.35% to 11 sen, giving the group a market capitalisation of RM72.46 million.