AGV Group says it is able to continue as a going concern, fulfil debt obligations

AGV Group said on Thursday that its board is of the view that it is able to continue as a going concern, in response to queries from the Singapore Exchange on its full-year financial results ended Sept 30, 2018.

The group, which makes galvanised steel and repairs corroded metals, also said that it will have "sufficient cash for its operations any other payables", even though its current free cash balance remains low. As at March 19, the free cash balance of the group was S$110,000.

The group said that with the replacement of its zinc kettle, which was previously damaged, it will now be able to generate higher revenue from operations. It also said that since the group is operating on 30-days credit terms, it has recently been able to commence collection of receivables from its customers.

AGV Group added that it is confident that with Chua Wei Kee - one of the largest zinc suppliers in the region - coming onboard as the group's non-executive director and non-executive chairman, his support will help the group overcome any increased costs of the commodity.

The group also said that it will be able to fulfil its current debt obligations. The balance of the new loans that remains unutilised is S$2.5 million, which exceeds its net current liabilities as at March 19, 2019.

In its latest FY2018 results, the group had posted a net loss of S$12.1 million from a net loss of S$4.1 million a year earlier, dragged down by a surge in zinc prices and structural damage to its zinc kettle.