NutryFarm International Limited (Under Judicial Management): FY2022 Financial Analysis and Outlook
NutryFarm International Limited, incorporated in Bermuda and listed in Singapore, has released its audited financial statements for the financial year ended 30 September 2022. The company remains under judicial management, with trading in its shares suspended since April 2022. This article analyses the key financial metrics, corporate developments, and risks disclosed in the financial report, providing a structured overview for investors and financial professionals.
Key Financial Metrics
| Metric |
FY2022 |
FY2021 |
YoY Change |
| Net Loss (Group) |
HK\$81,454,000 |
HK\$111,453,000 |
+26.9% (reduced loss) |
| Net Cash Outflow (Operating) |
HK\$27,340,000 |
HK\$3,404,000 |
+703% (higher outflow) |
| Total Liabilities Exceed Assets (Group) |
HK\$133,478,000 |
HK\$60,720,000 |
+120% (worsened) |
| Current Liabilities Exceed Current Assets (Group) |
HK\$148,536,000 |
HK\$34,262,000 |
+334% (worsened) |
| Total Liabilities Exceed Assets (Company) |
HK\$166,001,000 |
N/A |
N/A |
| Current Liabilities Exceed Current Assets (Company) |
HK\$226,847,000 |
HK\$10,596,000 |
+2042% (worsened) |
| Dividend Proposed |
None |
None |
No Change |
Historical Performance Trends
The company has recorded consecutive years of significant net losses and increasing cash outflows from operations. Both total and current liabilities have substantially exceeded assets, showing a deteriorating balance sheet position. No dividends have been declared for the past two years.
Disclaimer of Audit Opinion and Financial Irregularities
- Disclaimer of Opinion: The independent auditors were unable to express an opinion on the FY2022 financial statements due to insufficient appropriate audit evidence, limitations in access to accounting records, and unresolved opening balances. The preceding years’ audits were also disclaimed for similar reasons.
- Outstanding Investigations: An independent reviewer was appointed to investigate transactions and events prior to 2019, including proposed acquisitions and large advances to third parties, but the findings report remains pending.
- Going Concern Doubts: There are material uncertainties casting significant doubt on the company’s ability to continue as a going concern. The financials do not reflect potential adjustments necessary if the company fails to continue as a going concern.
Corporate Actions and Restructuring
- Judicial Management: The company has been under judicial management since June 2022, with several extensions up to November 2025. During this period, powers of the directors are vested in the Judicial Manager.
- Debt Restructuring: In November 2023, creditors approved a revised Statement of Proposal. In July 2024, a restructuring agreement allowed creditors to receive a lump sum cash payment (20% of claims) from the largest creditor, Corpbond, in exchange for waiving further claims against the company.
- Fundraising: The company secured an interest-free S\$5 million loan from Alpha Hill Pte. Ltd. in October 2024, with repayment options including cash or share issuance. Further loans were obtained by AI Nova (a subsidiary) totaling US\$10.5 million for working capital, also with conversion features subject to resumption of trading.
- Asset Recovery: Corpbond extended a S\$1 million loan for asset recovery. Significant amounts are tied up in advances and uncollected deposits related to failed acquisitions.
- Business Pivot: The company is exploring new business ventures via AI Nova, including technical testing and wholesale trade. Proposals for resumption of trading and updated forecasts were submitted to SGX-ST in 2025.
Legal, Regulatory, and Exceptional Items
- Legal Proceedings: Judicial management has stayed all suits, claims, and proceedings against the company unless permitted by the Judicial Manager or the Court.
- Contingent Liabilities: Settlement agreements relating to potential customer compensation exist, but no claims have been filed and no provisions have been made.
- Related Party and Historical Advances: Large advances to related parties and third parties remain unresolved, including HK\$59.2 million owed by Mr. Wang Xiaoxin and RMB33.5 million from Beijing Zhonglian Shengtong Internet Technology Co. Ltd.
Forecasts and Outlook
The company’s ability to continue hinges on successful restructuring, securing new financing, and implementing its new business strategy. All plans are subject to regulatory and shareholder approval, and the outcome is highly uncertain. The financial statements were prepared on a going concern basis, but auditors highlight significant uncertainty and lack of evidence to support this assumption.
Chairman’s Statement
No Chairman’s Statement was included in the report.
Conclusion and Investment Recommendations
Overall Assessment: The financial position of NutryFarm International Limited is weak, with sustained losses, negative equity, cash outflow, and multiple audit disclaimers. Major uncertainties persist regarding the company’s ability to remain a going concern, pending investigations, and the success of restructuring and business transformation efforts.
Recommendations
- If You Are Currently Holding the Stock: Exercise extreme caution. Consider reducing exposure or exiting your position, as trading remains suspended and there is substantial risk of further financial deterioration or adverse outcomes from ongoing investigations and restructuring.
- If You Are Not Currently Holding the Stock: Avoid initiating a position until there is clear evidence of financial recovery, successful restructuring, and regulatory approval for trading resumption. The company faces immense risks and uncertainties that make it unsuitable for prudent investment at this time.
Disclaimer: This analysis is based solely on information disclosed in the company’s financial report. It does not constitute investment advice. Investors should consult with their financial advisors and consider their own risk tolerance before making investment decisions regarding NutryFarm International Limited.
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