KUALA LUMPUR (Oct 30): LEAP Market-listed GPP Resources Bhd (KL:GPP), which is involved in renewable energy and oil palm trunk plywood, has been flagged by its external auditor over material uncertainty surrounding its ability to continue as a going concern, despite receiving an unmodified audit opinion.

In its bourse filing, the group said its external auditor Messrs Al Jafree Salihin Kuzaimi PLT (Salihin) highlighted that the group's  net loss of RM2.37 million for the financial year ended June 30, 2026 (FY2026).

The group's current liabilities exceeded its current assets by RM20.72 million, while shareholders’ deficits stood at RM23.52 million. 

“The events or conditions indicate that a material uncertainty exists that may cast significant doubt on the group and the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter,” the auditor said.

To address the concerns, GPP Resources said related parties had undertaken not to demand full settlement of amounts owing to them for 12 months from the date of the auditor's report.

The group said the continued financial support would help ease immediate liquidity pressures and provide greater cash flow flexibility.

It added that its major subsidiary, Green Energy Resources (M) Sdn Bhd, is expected to generate sufficient operating cash flow over the next 12 months through ongoing projects and recurring activities in the renewable energy segment. The subsidiary may also provide financial assistance to the group to meet its short-term obligations, if necessary.

Additionally, a related company with common directors has committed to providing financial support, including up to RM2 million in funding, to meet the group's working capital and liquidity requirements.

GPP Resources said it is also reviewing its cost structure, stepping up receivables collection, prioritising profitable business segments and pursuing new opportunities in its renewable energy portfolio to strengthen cash generation.

“Subject to normal market conditions and barring unforeseen circumstances, the board anticipates that the measures outlined above will be substantially implemented and show effect within the next financial year,” it said.

GPP Resources added that its board expects the operating environment to remain supportive, underpinned by growing demand for renewable energy-related solutions in Malaysia.

GPP Resources has been loss making since 2020. For FY2026 ended June 30, the group widened its net loss to RM2.24 million from RM813,000 a year earlier, as revenue declined to RM10.36 million from RM13.28 million. 

Shares of GPP Resources were last traded at 28 sen, valuing the group at RM43.4 million.