Wilton Resources Corporation Limited: FY2024 Financial Analysis and Investor Outlook

Wilton Resources Corporation Limited (“Wilton Resources” or “the Group”) released its audited financial statements for the year ended 31 December 2024. This analysis summarizes the key financial results, highlights material issues, and discusses significant events and risks that may impact investors’ decisions.

Key Financial Metrics

Historical Performance and Trends

• Revenue Collapse: Revenue fell drastically by 66% year-over-year, from Rp 3,990 million to Rp 1,341 million, indicating severe operational challenges and possible production or sales constraints.
• Worsening Losses: Both operating and net losses deepened, with higher operating expenses and finance costs compounding the impact of falling revenue.
• Liquidity Crisis: The Group’s current liabilities exceed current assets by Rp 674,397 million, raising substantial doubts about its short-term solvency.

Material Uncertainties and Auditor’s Disclaimer

The independent auditor, PKF-CAP LLP, issued a disclaimer of opinion on the FY2024 financial statements. The primary reasons:

• Going Concern Doubts: The Group incurred significant losses, faces negative operating cash flows, and must repay Rp 455,833 million in external borrowings in early 2025. There is material uncertainty over both the Group’s and Company’s ability to continue as going concerns. The auditor could not obtain sufficient evidence to assess the appropriateness of the going concern assumption.
• Impairment Uncertainty: The auditor could not verify management’s assessment that the Group’s mine properties, property, plant & equipment, right-of-use assets, and investments in subsidiaries are unimpaired. Management’s forecasts assume a return to stable operations, which is uncertain given operational setbacks and ongoing financial distress.
• Prior Year Disclaimer: The FY2023 accounts were also issued with a disclaimer of opinion by a different auditor, indicating persistent, unresolved issues.

Exceptional and Significant Events

• Natural Disaster Impact: In December 2024, the Ciemas Gold Project was severely impacted by La Niña-driven heavy rains, resulting in flash floods, landslides, power outages, and logistical disruptions. Though the main processing facilities were undamaged, operations were disrupted due to unstable power and supply chain interruptions.
• Ongoing Legal and Debt Issues: The Group is in discussions with Karl Hoffmann Mineral Pte. Ltd. regarding repayment of a project financing liability (US\$25.6 million as of year-end, plus interest), after failing to meet previous repayment deadlines. Statutory demands for payment have been served, but as of year-end, no resolution has been reached.
• Working Capital Loan: The Group relies on a working capital facility from an independent lender, with Rp 18.0 billion still available for drawdown as of the report date. Terms require repayment within 30 days of written notice from the lender, further stressing liquidity.
• Equity Dilution: The Group disposed of minority interests in its Indonesian subsidiary, increasing non-controlling interests and recognizing gains in equity reserves, but this did not materially improve the Group’s financial position.

Related Party and Unusual Transactions

• Share Pledge: 200 million shares in PT Wilton Makmur Indonesia Tbk were pledged as collateral for payables to a third party, further limiting financial flexibility.
• No Dividend: No dividend was declared for FY2024, consistent with the previous year, reflecting the Group’s precarious financial state.

Forecasts and Management Outlook

• Strategic Measures: Management is pursuing cost reductions, attempting to secure further credit from vendors, and intends to focus on processing oxide ores in late 2025, gradually transitioning to mixed ore sources.
• Professional Advisors: The Group has engaged professional firms to assist in exploring strategic options, but no concrete turnaround plan is disclosed or confirmed.

Conclusion & Investor Recommendations

Overall Assessment: Wilton Resources Corporation Limited’s FY2024 financials are weak, with deepening losses, severe liquidity shortfalls, and significant doubt cast by the auditor over the Group’s ability to continue as a going concern. The operational impact of the La Niña disaster and ongoing debt and legal issues further cloud the outlook. No dividend is proposed, and there is no clear evidence of imminent recovery or refinancing success.

Investor Recommendations

• If you currently hold shares: Consider reducing or exiting your position. The persistent material uncertainties regarding going concern, unresolved debt obligations, and lack of operational turnaround increase the risk of permanent capital loss. While a speculative turnaround is possible if the Group secures new financing or a strategic investor, the probability of further value erosion currently outweighs potential upside.
• If you do not currently hold shares: Avoid initiating a new position. Wait for demonstrable evidence of financial stabilization, successful debt restructuring, or a positive operational inflection. The risk-reward profile is currently highly unfavorable.

Disclaimer: This analysis is based solely on publicly disclosed financial statements and does not constitute investment advice. Investors should conduct their own due diligence and consider their individual risk tolerance before making any investment decisions.

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