Lorenzo International suspended trading in its shares on Friday after its auditor withheld its opinion and raised doubts about the company's status as a going concern.
Lorenzo, a furniture seller, announced after the market closed on Thursday that auditor Foo Kon Tan had issued a disclaimer of opinion on the company's finances for the year ended March 31, 2018.
In its annual report filed yesterday morning, Lorenzo posted an audited pre-tax loss of $10.4 million, deeper than the unaudited $9.2 million loss it had earlier announced.
The auditor said it did not obtain enough appropriate audit evidence to provide a basis for an audit opinion and said there are material uncertainties on the group's ability to continue as a going concern, citing the group's net current liabilities of $14.6 million and sustained net operating cash outflow of over $594,000 as of the end of its financial year.
The company had projected profitability for the next year based on sales and related forecasts, and its ability to source for refinancing of borrowing. But the auditor said the cash flow projection for the next 12 months resulted in a net cash outflow and the group might not be able to discharge its liabilities.
While some directors and shareholders provided a letter of financial undertaking to provide financial support so the group can meet its liabilities and continue operations in the next 12 months, the auditor did not get enough evidence to attest to their financial capability, among other issues.
Lorenzo's six-month daily average market capitalisation was $6.4 million as of Thursday, putting the mainboard-listed company at risk of being placed on the Singapore Exchange's watch list for possible delisting.
SilkAir, the regional arm of Singapore Airlines (SIA), will be increasing its flight frequency to Cairns, Australia, from the current five flights a week to daily flights from June 2 next year.
The additional flights will be operated on Tuesdays and Sundays with Boeing 737 MAX 8 aircraft, fitted with 12 business-class and 144 economy-class seats. But they are subject to regulatory approvals, SIA announced yesterday.
Queensland's Tourism Industry Development Minister Kate Jones said demand for SilkAir's service to Cairns had grown significantly with support from the state's Attracting Aviation Investment Fund. "This route has delivered strong outcomes for Queensland... and these additional flights will attract up to 10,200 visitors over two years, supporting up to 240 jobs."