The Philippine Stock Exchange (PSE) suspended the trading of PAL Holdings, Inc. shares beginning Friday after the exchange noted a disclaimer of opinion of the company’s independent auditor on the listed company’s annual report.
“We do not express an opinion on the accompanying consolidated financial statements,” SyCip, Gorres, Velayo & Co. said in the company’s annual report, which was disclosed Thursday.
“Because of the significance of the matters described in the Basis for Disclaimer of Opinion on the 2020 Consolidated Financial Statements section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these consolidated financial statements,” it added.
The local bourse put the company’s stocks on a trading halt at 9:30 a.m. on Thursday after taking note of the disclaimer.
SyCip, Gorres, Velayo said its basis for the disclaimer is that it had “not been able to obtain sufficient appropriate audit evidence to conclude as to whether the use of the going concern assumption in preparing these consolidated financial statements is appropriate.”
The company’s deals with lessors and creditors have yet to be concluded, it said.
It also noted that PAL Holdings is going on a financial restructuring plan to ensure its business continuity. The company is said to be considering filing a pre-negotiated court-rehabilitation in an overseas jurisdiction.
The listed operator of flag carrier Philippine Airlines widened its net loss after tax to P73.08 billion in 2020 due to the impact of the pandemic on the airlines’ operations. Its net loss attributable to equity holders of the parent company also surged to P71.91 billion in 2020 from P10.31 billion the previous year.
“After a review of PAL’s 2020 Annual Report, the exchange deems that the said report is not in compliance with Rule 68, as amended, of the SRC (Securities
Regulation Code),” the PSE said on Friday, resulting in the trading suspension.
The rule states that “(t)he AFS (audited financial statement) of companies covered by Part II of this Rule with an auditor’s opinion other than unqualified because of deviation(s) from the required financial reporting framework or due to a scope limitation imposed by the company, shall be considered a violation of this Rule.”
PAL Holdings has yet to respond to BusinessWorld’s request for comment.
Shares of PAL Holdings at the local bourse were last traded on Wednesday for P6.05 each.