PETALING JAYA – Barakah Offshore Petroleum Bhd’s share price fell as much as 18.8%, after its external auditor threw doubt on its ability to continue as a going concern due to losses and borrowings incurred by the group.
The stock closed morning trade 14% or 3.5 sen lower to 20.5 sen, with some 5.8 million shares changing hands.
Its share price has lost 68.5% of its value in the last one year.
Barakah Offshore’s auditors Messrs Crowe Horwath have raised concerns over its ability to continue as going concern after the group incurred a net loss of RM216.75 million and negative cash flow of RM71.83 million as at end-December 2017.
Barakah’s borrowings that are due for repayment in the next 12 months amounted to RM38.53 million as at end-December 2017.
Crowe Horwath believes the group’s ability to continue as a going concern is dependent on the generation of sufficient cash flow from its operations, the partial release of the fixed deposits pledged as security for certain banking facilities and the recoverability of current tax assets.
Its fixed deposits stood at RM102.71 million.
Nonetheless, Barakah stressed that its balance sheet is still at a manageable level despite the reduction in net assets.
“For FY2018, the company will focus on winning tenders and continue with cost rationalisation to sustain its operation and cash flow.”