KUALA LUMPUR (July 24): Lebtech Bhd said the RM55.3 million sub-contract it secured in April this year that involves beach reclamation and shore protection in Kampung Tg Batu Nenasi, Pekan, Pahang, has been mutually terminated.

This was because the builder could not come to an agreement with Global Marine Sdn Bhd, from whom it secured the project, on the terms and conditions of the final definitive agreement for the job.

"Therefore the parties have mutually agreed to terminate the letter of award issued by Global Marine Contractor Sdn Bhd to Lebtech Construction Sdn Bhd, a wholly owned subsidiary of Lebtech," Lebtech said in a bourse filing Monday (July 24).

Global Marine was awarded the sub-contract of the project by Vista Infinity Development Sdn Bhd, which secured the project from the Ministry of Natural Resources, Environment and Climate Change. The contract was supposed to be completed in 33 months.

For FY2022, Lebtech reported a net profit of RM74,000, down 77% from RM326,000 in FY2021, as revenue fell 23.4% to RM20.17 million from RM26.33 million, as the group’s construction projects were in the final stages of completion.

Also in April this year, Lebtech’s external auditor has raised a material uncertainty on the construction group's ability to continue as a going concern, with regards to its business activities during FY2022, which auditor Al Jafree Salihin Kuzaimi PLT noted all derived from related parties, while 98% of its trade and other receivables were due from related parties.

“This has inadvertently increased the exposure to the credit risk and going concern risk,” said the auditor in a report filed with Bursa Malaysia by Lebtech.

Nonetheless, Al Jafree Salihin Kuzaimi expressed unqualified opinion in respect of Lebtech’s FY2022 accounts, meaning that the auditor is satisfied that the group's financial statements provide a “true and fair” view of its fiscal position, performance and cash flows.

Subsequently, Lebtech announced on July 3 that its board of directors have approved the change of its auditor from Al Jafree Salihin Kuzaimi to Jamal, Amin & Partners.

At 3.22pm, shares of Lebtech traded unchanged at 79 sen, valuing the group at about RM108 million.

Read also:
Lebtech unit wins RM55.3m job for reclamation, shore protection, revetment works in Pekan
Lebtech’s auditor raises going concern uncertainty as revenue came from related parties