Ssangyong Motor, Auditor's Opinion Rejected for Q1 This Year..."Uncertainty Over Going Concern"

[Asia Economy Reporter Suyeon Woo] Ssangyong Motor received a 'disclaimer of opinion' from an external auditor in its first quarter quarterly report this year.

According to Ssangyong Motor's first quarter performance quarterly report on the 17th, the external auditor Samjong Accounting Corporation issued a disclaimer of opinion due to uncertainty about the going concern assumption. Samjong Accounting Corporation stated, "As of the end of the reporting period, Ssangyong Motor recorded an operating loss of 97.751 billion KRW and a quarterly net loss of 192.896 billion KRW," adding, "Furthermore, the company's current liabilities exceeded current assets by 576.748 billion KRW."

They continued, "This situation raises significant doubts about the company's ability to continue as a going concern," and added, "We were unable to obtain sufficient audit evidence to reasonably estimate adjustments to assets, liabilities, and related profit and loss items that may result from the ultimate outcome of this uncertainty."

This disclaimer of opinion is interpreted as being influenced by Ssangyong Motor's recent deteriorating performance and the suspension of support from its major shareholder Mahindra. Moreover, since February, production has decreased due to line shutdowns caused by disruptions in overseas parts supply amid the global spread of the novel coronavirus disease (COVID-19).

Ssangyong Motor recorded sales of 649.2 billion KRW, an operating loss of 98.6 billion KRW, and a net loss of 193.5 billion KRW in the first quarter of this year. First quarter sales volume was 24,139 units, down 20.7% compared to the same period last year, and sales revenue also plunged 30.4%. The operating loss widened compared to 27.8 billion KRW in the same period last year, continuing a 13-quarter consecutive deficit streak.

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