Parkson Retail Asia's auditor flags going concern

PARKSON Retail Asia's auditor has flagged the department store operator's ability to continue as a going concern, given that its total liabilities exceeded total assets by about S$66 million.

In its report for the audited financial statements for the year ended June 30, the auditor Ernst & Young (EY) highlighted as an emphasis of matter that the group incurred a net loss of about S$85 million, current liabilities exceeded its current assets by S$117.4 million, and total liabilities exceeded total assets by S$66 million as at the financial year-end.

These conditions indicate the existence of a material uncertainty that may cast significant doubt about the group's ability to continue as a going concern, Parkson Retail Asia reported in a regulatory filing on Monday.

EY, however, did not qualify its opinion.

Parkson Retail Asia said its operations were significantly impacted by movement restrictions and store closure caused by the pandemic in its key markets.

The ability of the group to continue as a going concern is dependent on it generating sufficient cash flows from operations to meet working capital needs and continued support from its suppliers and creditors, Parkson Retail Asia said.

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But its board said the auditor's report for the preceding financial year had also included a similar emphasis of matter.

The counter ended flat at 1.4 Singapore cents on Monday, and it is still under watch-list by the bourse operator.