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Vibrant swings to S$88.7m loss on full writedown of Blackgold unit

THE full impairment on its Blackgold Group acquisition following several accounting irregularities and a fire that destroyed Blackgold's accounts has sunk Vibrant Group's results into the red for the full financial year ended April 30.

The freights and logistics, real estate and financial services group posted a net loss of S$88.7 million, from a net profit of S$3.4 million for the previous year, the group said in a Singapore Exchange filing late on Wednesday.

Vibrant booked impairment losses of S$63.2 million from its investment in Blackgold and the unit's receivables.

After adding back the impairment losses from its Blackgold investment, the adjusted net loss would stand at S$1.95 million, due to impairment losses of receivables and available-for-sale financial assets, foreign exchange loss and higher operating expenses. 

Moreover, Vibrant announced that Blackgold's financial statements were deconsolidated from the group unaudited financial statements for the year ended April 30, 2018.

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It said Blackgold Group is unable to provide a complete set of financial statements for consolidation purposes. This is because "the financial information is incomplete, not accurate and unreliable".

Said Vibrant: "The group is also unable to control the state of affairs at Blackgold Group. In view of these difficulties faced by the group, it is meaningless and misleading to consolidate the incomplete financial statements of Blackgold Group."

Aside from its Blackgold troubles, revenue for Vibrant shrank 5 per cent to S$175.5 million from the preceding year, which the company said was due to lower sales revenue from the real estate business and financial services business.

In particular, the decrease in revenue for the financial services segment to S$11.9 million as compared to S$17.4 million a year ago was due to impairment losses on investment in Blackgold and on receivables from Blackgold. 

The real estate business also saw a decline in revenue on lower contribution of the government-approved resettlement housing project in Jiangyin, China which was completed and handed over in May 2017.

Vibrant Group recorded a loss per share of 13.09 Singapore cents, compared with earnings per share of 0.59 Singapore cent in the previous year. Net asset value per share fell to 30.12 Singapore cents as at April 30, from 61.66 Singapore cents in a year ago.

No dividend was declared for the current financial period compared to 1.5 Singapore cents for the previous year.

Vibrant had purchased 94.18 per cent of the shares of Blackgold through a scheme of arrangement approved by Australian court on July 13, 2017, for A$37.6 million (S$37.0 million). 

But later, Vibrant's auditors discovered accounting irregularities and discrepancies for the coal mining and coal trading receipts and sales invoices, leading to the appointment of the special auditors. 

Then, in August 2018, the accounting records of Blackgold Group were destroyed by a fire incident.

It was reported that eight of Vibrant's subsidiaries held through its fully-owned subsidiary Blackgold International Holdings were being sued for allegedly failing to meet certain payment and guarantee obligations under a 500 million yuan loan facility for which they had provided security.

Vibrant's chief executive Eric Khua said in a statement accompanying the results release: "Even as we are continuing to take action to resolve the issue and to pursue recovery, we have decided to take the difficult but prudent decision to write Blackgold down in its entirety, while remaining focused on our business."

He said that Vibrant has a "steady growth pipeline, with projects that will progressively come onstream and contribute to the business growth".

These include the potential S$220 million sale and leaseback of 121 Banyan Drive, full tenancy of 139 Cecil Street, a joint venture with Chongqing Connectivity Initiative (CCI) Eurasia Land Bridge Logistics Development, and the Pucheng Project.

Mr Khua added: "The coming months will be spent evaluating and restructuring our business and strategy. We are confident that we will emerge from this episode to deliver sustainable growth for all stakeholders."

Vibrant Group shares finished down S$0.003 or 1.8 per cent at S$0.167 on Wednesday.

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