Blumont auditors flag company's material uncertainty as going concern

Blumont's board said that while a material uncertainty exists, the steps proposed by the management are achievable.
Blumont's board said that while a material uncertainty exists, the steps proposed by the management are achievable.PHOTO: ST FILE

SINGAPORE - Blumont Group's auditors have highlighted a material uncertainty about the company's ability to remain a going concern, citing a net loss, negative cash flows and net current liabilities for its latest financial year.

The group had incurred, for the year ended Dec 31, 2017, a net loss after tax of S$2.6 million, recorded negative cash flows from operating activities of S$2.1 million and net current liabilities of S$5.2 million.

Blumont's board said that while a material uncertainty exists, the steps proposed by the management are achievable and believe that the group will be able to raise sufficient funds to fund its operations for the next 12 months.

These measures include continuing financial support from Blumont's ultimate holding company Ultimate Horizon, with Ultimate not demanding repayment of the loans due within 12 months from the reporting year-end date.

Blumont also intends to settle a legal suit in Malaysia over the sale of a condominium unit at Suasana Sentral, from which it expects to collect the balance payment of the sales proceeds of about S$1 million.

The group will continue to evaluate various strategies, such as obtaining alternative sources of funds and the sale of its other assets, to improve profitability and generate positive cash flows from its current business activities, Blumont said.

Blumont's businesses include investment holding, contract sterilisation and polymerisation services, property, and energy.

Its shares finished S$0.001 or 20 per cent down at S$0.004 on Tuesday.