Parkson Retail Asia’s auditor Ernst & Young says the department-store chain may not be earning enough to continue trading as a going concern given that its total liabilities exceed its total assets.
EY’s report highlighted the group’s full year net loss of about US$62.5 million, and pointed to the fact its current liabilities exceed current assets by US$86.3 million and total liabilities exceed total assets by US$48.5 million.
“These conditions indicate the material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern,” Parkson Retail Asia’s executive chairman Tan Sri William Cheng Heng Jem said.
“The ability of the group to continue as a going concern is dependent on the group generating sufficient cash flows from its operations to meet working capital needs and continued support from its suppliers and investors.”
According to EY, the group’s operations have been significantly impacted by Covid-19-related movement restrictions and store closures across its key markets of Malaysia, Vietnam, Myanmar, Cambodia and Indonesia.
Parkson Retail Asia’s share price fell more than 14 per cent on the warning.