KUALA LUMPUR: Ornamental fish breeder Xian Leng Holdings Bhd fell deeper into the red in its third quarter ended Oct 31 as net losses widened to RM58.75 million from RM1.3 million the previous quarter due to impairment losses on the property, plant and equipment of its subsidiaries.
Revenue rose 38.9% to RM4.896 million from RM3.5 million in 2QFY12 mainly due to higher Arowana production which led to higher sales volume in the current quarter.
Xian Leng pinned the losses before tax of RM64.14 million on an additional provision of impairment losses on property, plant and equipment amounting to RM63.3 million.
Out of the RM63.3 million loss, RM11.19 million stemmed from a single subsidiary, the company said. In view of continuing losses, the board has decided to fully impair all the subsidiary’s property, plant and equipment.
The remaining RM52.11 million in impairment losses arose from the impairment of Arowana breeding fish ponds of another subsidiary.
“Due to the declining production which was further compounded by aggressive price competition, the future benefit generated from the fish ponds is expected to be lower. As a result, impairment of assets has to be provided to the subsidiary’s property, plant and equipment,” it said in the announcement to Bursa Malaysia yesterday.
3QFY11, Xian Leng turned in a net profit of RM633,000. Meanwhile, revenue for 3QFY12 was 3.2% lower compared with RM5.05 million in the same period last year.
Year-on-year, operating profits fell to RM1.19 million, down 151.26% from RM2.99 million the previous year.
In October, Xian Leng had reported “possible financial irregularities” pertaining to capital expenditure of RM17.36 million between 2006 and 2008.
The nature and extent of the irregularities have yet to be determined, but PricewaterhouseCoopers Advisory Services Sdn Bhd was appointed an independent auditor by the company on Oct 17 and the audit is expected to take 14 weeks to complete.
The scope of the special audit covered seven years from Feb 1, 2001 to Jan 31, 2008.
This article appeared in The Edge Financial Daily, December 28, 2011.
Revenue rose 38.9% to RM4.896 million from RM3.5 million in 2QFY12 mainly due to higher Arowana production which led to higher sales volume in the current quarter.
Xian Leng pinned the losses before tax of RM64.14 million on an additional provision of impairment losses on property, plant and equipment amounting to RM63.3 million.
Out of the RM63.3 million loss, RM11.19 million stemmed from a single subsidiary, the company said. In view of continuing losses, the board has decided to fully impair all the subsidiary’s property, plant and equipment.
The remaining RM52.11 million in impairment losses arose from the impairment of Arowana breeding fish ponds of another subsidiary.
“Due to the declining production which was further compounded by aggressive price competition, the future benefit generated from the fish ponds is expected to be lower. As a result, impairment of assets has to be provided to the subsidiary’s property, plant and equipment,” it said in the announcement to Bursa Malaysia yesterday.
3QFY11, Xian Leng turned in a net profit of RM633,000. Meanwhile, revenue for 3QFY12 was 3.2% lower compared with RM5.05 million in the same period last year.
Year-on-year, operating profits fell to RM1.19 million, down 151.26% from RM2.99 million the previous year.
In October, Xian Leng had reported “possible financial irregularities” pertaining to capital expenditure of RM17.36 million between 2006 and 2008.
The nature and extent of the irregularities have yet to be determined, but PricewaterhouseCoopers Advisory Services Sdn Bhd was appointed an independent auditor by the company on Oct 17 and the audit is expected to take 14 weeks to complete.
The scope of the special audit covered seven years from Feb 1, 2001 to Jan 31, 2008.
This article appeared in The Edge Financial Daily, December 28, 2011.
