The external auditor says its decision is based on the cement manufacturer’s bad performance in the review period.
The company’s share price has fallen steadily since its multi-year losses started in 2015, with the stock closing at Sh2.9 on Thursday.
The cement manufacturer’s sales declined 32 per cent to Sh8.6 billion in the review period amid vicious price wars in the Tanzanian market.
ARM Cement’s #ticker:ARM external auditor Deloitte & Touche has withheld its opinion on the company’s financial statements for the year ended December, saying there is significant doubt about the company’s continued operations.
The external auditor says its decision is based on the cement manufacturer’s bad performance in the review period when its net losses widened 2.3 times to Sh6.5 billion and short term liabilities exceeded current assets by Sh13.4 billion.
“These conditions combined with the historical performance of the group indicate that a material uncertainty exists which may cast a significant doubt on the group’s ability to continue as a going concern,” Deloitte said in its report.
“As a result of the disclaimer of opinion on the audited consolidated financial statements discussed in the audited financial statements and our report thereon, it is inappropriate to express an opinion on the accompanying summary consolidated financial statements.”
ARM is yet to finalise its asset sales, new capital raising, and debt restructuring that it says is key in turning around its operations. The company is expected to give investors an update on its recovery efforts at the end of August.
“The group anticipates providing shareholders with an interim update of its efforts within 90 days from this announcement,” the company said, adding that it is expanding the list of assets to be sold in the near term.
ARM did not specify which new assets could be offloaded in addition to an earlier announcement of selling the non-cement businesses including subsidiaries involved in fertiliser and mineral production.
The cement manufacturer’s sales declined 32 per cent to Sh8.6 billion in the review period amid vicious price wars in the Tanzanian market where the commodity’s price fell 30 per cent. ARM’s deeper losses ate into its shareholder funds which dropped by Sh7 billion to Sh20.7 billion.
The company’s share price has fallen steadily since its multi-year losses started in 2015, with the stock closing at Sh2.9 on Thursday in what assigned it a market value of Sh2.7 billion.
The company has brought on board several corporate fixers including dealmakers who are expected to help in the assets disposal.
