Scomi Engineering's shares fall 7% on auditor's concerns

PETALING JAYA: Scomi Engineering Bhd's share price fell as much as two sen or 7% today, after its auditor Messr KPMG PLT issued a statement doubting its sustainability as a going concern on the premise of its ongoing dispute with Prasarana Malaysia Bhd (PMB) over a RM494m monorail expansion contract.
Its shares were trading at 25.5 sen, with 161,500 shares traded.
KPMG highlighted that the group has outstanding revolving credits and bank overdraft amounting to RM213.2 million owing to the project lenders that are classified as current liabilities.
"The ultimate outcome of these ( the action against PMB and the Appeal hearing on the litigation matter of this project) and related recoveries of amounts owing on this project cannot presently be determined. In relation to this, the group has yet to secure further extension from the lenders who have provided project financing for the project," it said.
It has however, not changed its unqualified opinion for the group's financial statements for the financial year ended Mar 31, 2017.
The group in response to the statement by the auditor said it is pursuing all avenues to recover the claims in relation to the project with Prasarana, on the advice of solicitors; and is pursuing various fundraising exercises, with regards to the use of our technology in new markets via synergistic ventures. It expects to close such an arrangement in six months. Management also continues to bid for new projects in both the monorail and commercial vehicles segments; it will also continue to focus on cost optimisation programmes and continuous product improvements and developments to remain competitive in each of the sectors it is involved in.