Korea Technology's Audit Report 'Unqualified'... "Capital Impairment Temporary, Expected to Resolve Within Q1"

[Asia Economy Reporter Jang Hyowon] Korea Technology, a KOSDAQ-listed company, announced on the 23rd through a public disclosure that it has submitted the 2021 audit report and business report with an unqualified opinion.

According to the report, Korea Technology's 2021 sales amounted to approximately KRW 353.1 billion on a consolidated basis, an increase of about KRW 29.9 billion (9.2%) compared to the previous year, and operating profit recorded KRW 5.6 billion, up about 8.9% year-on-year.

However, due to the reason for designation as a management item announced by the KOSDAQ Market Headquarters of the Korea Exchange, trading of the company's shares was temporarily suspended until the close of the stock market on the day of the disclosure.

The company expects that the risk of capital erosion, which temporarily exceeded a certain ratio during the process of restructuring non-core businesses deemed to have low profitability, will be resolved within the first half of this year.

A company official stated, “Although performance improved with sales (9.2%) and operating profit (8.9%), capital erosion occurred temporarily during the business restructuring process,” adding, “We expect the cause of capital erosion to be resolved by the first quarter or, at the latest, within the first half of the year through profitability improvement and liquidity securing measures such as asset sales.”

He continued, “Once the cause of capital erosion is resolved, the management item designation will remain only nominally,” and said, “We will take this opportunity to simultaneously secure financial soundness and achieve maximum performance.”

Furthermore, the company stated, “We will strengthen business competitiveness by focusing on core businesses and restructure the business by enhancing synergy through cooperation with our subsidiary Daewoo Shipbuilding & Marine Engineering Construction,” adding, “We are establishing a sustainable management strategy that will satisfy investors, customers, and employees alike, and plan to disclose it soon through a public announcement.”

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