Auditors flag uncertainty on Katrina Group’s ability to continue as a going concern

[SINGAPORE] The independent auditors for Katrina Group have highlighted uncertainty on the company’s ability to continue as a going concern, primarily that the net and current liabilities of the group – which includes its subsidiaries – exceed its net and current assets.

In a bourse filing on Friday (Apr 10), the Catalist-listed hospitality, food and beverage company stated that its independent auditors EY had raised uncertainties in its report.

The report was based on the company’s financial statements as at Dec 31, 2025, among other financial documents. The auditor noted that the group and company incurred a net loss of S$2.8 million and S$128,000, respectively, in the financial year.

Accordingly, the group’s net liabilities and current liabilities exceeded its net assets and current assets by S$6.7 million and S$18.4 million, respectively, which are a material uncertainty that may cast significant doubt about the group’s and the company’s ability to continue as a going concern.

Thus, the ability for Katrina to continue as a going concern hinges on it generating sufficient cash flow from its operations, as well as continuing financial support from one of the directors and his spouse not to recall an amount previously extended to the group.

The auditor also emphasised another uncertainty related to ongoing litigation by the Urban Redevelopment Authority.

Uncertainty in report

In July, Katrina’s subsidiary ST Hospitality was among four firms and two individuals charged over providing illegal short-term stays. The accused were charged with a total of 340 counts of providing such stays, with each charge carrying a maximum possible fine of S$200,000.

EY’s opinion in the report remained unqualified.

In the bourse filing, Katrina’s board said that it is appropriate to prepare financial statements on a going concern basis. It said that it will be able to generate sufficient cash from operations to pay its liabilities, that management continues to manage cashflow of its subsidiaries, and the director and his spouse have pledged not to recall an amount advanced to the group previously, among other things.

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Katrina released its FY2025 results on Feb 27, 2025. Besides the abovementioned net loss, its revenue dipped 16 per cent to S$46 million, as revenue from both of its key business segments declined.

It has 20 restaurants in Singapore under six brands, which include Bali Thai, Lotteria, So Pho and Streats. It also offers serviced apartments and co-living under its subsidiary ST Hospitality.

Shares of the counter closed trading unchanged at S$0.034.