KR Motors, Audit Opinion 'Unqualified'... "Concerns Over Designation as Management Item Resolved"

[Asia Economy Reporter Yoo Hyun-seok] KR Motors announced on the 16th that it has completely resolved concerns about being designated as a management item by submitting a special purpose audit report and completing disclosure.

At the end of last year, to improve its financial structure, the company executed a 75% capital reduction by merging 4 common shares into 1 share free of charge. Additionally, as a basis for resolving the management item designation, it submitted a 'special purpose audit report' confirming the improvement of the financial structure to the stock exchange on the 13th and received approval.

A company official stated, "This special purpose audit report reflects the performance of KR Motors and KR Global Networks up to the 6th of last month, and as a result, it is estimated that about 100 million KRW in operating profit was generated," adding, "The special purpose audit report was conducted only for KR Motors and KR Global Networks, and when the performance of the China JV, which accounts for a high proportion of sales, is reflected in the consolidated financial statements in the future, it is expected to show a greater improvement in performance."

So far, KR Motors has boldly streamlined models that were not profitable while producing domestically, and through department mergers and restructuring, it laid the groundwork for profit realization. Despite difficult conditions, it continuously invested in developing Euro 5 advanced technology engines, electric two-wheelers, and three-wheelers to respond to market changes.

In particular, by establishing a joint venture production plant with a major Chinese company and starting full-scale operations since last year, it experienced dramatic sales growth effects in 2019. A company official said, "An operating profit of 100 million KRW per month is the first profit achieved in six years since LVMC Holdings acquired KR Motors, and it is a significant figure indicating that the ongoing efforts for business normalization have entered the main track."

This content was produced with the assistance of AI translation services.