BURSA Malaysia has suspended the trading of AirAsia Group Bhd today after the group’s external auditor issued an unqualified opinion on the material uncertainty relating to the group’s ability to continue as a going concern.
The low-cost carrier’s auditor Ernst & Young PLT noted in a statement filed with Bursa Malaysia yesterday that the airline had posted a net loss of RM283 mil for the financial year ended Dec 31, 2019, and its liabilities had exceeded assets by RM1.84 bil.
“Further, in early 2020, the global economy, in particular the commercial airlines industry, faces uncertainty as a result of the unprecedented Covid-19 pandemic. The travel and border restrictions implemented by countries around the world has led to a significant fall in demand for air travel which impacted the Group’s financial performance and cash flows,” E&Y said.
These events or conditions, along with other matters as set forth in the financial statements, E&Y said, “indicate existence of material uncertainties that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern.”
Malaysia is still under recovery movement control order that includes international travel restrictions. Currently, only domestic flights are allowed.
Recently, AirAsia had announced improved seat booking, flight frequencies and load factors, pointing to increasing demand.
AirAsia posted a net loss of RM803.85 mil for the first quarter ended March 31, 2020, against a net profit of RM96.09 mil in the same period last year. Revenue declined 15.3% to RM2.31 bil from RM2.73 bil.
AirAsia shares yesterday closed four sen or 4.47% lower at 86 sen for a market capitalisation of RM2.86 bil. – July 8, 2020
